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Palestinians battle with Israeli police after clashes erupted in occupied Jerusalem's neighbourhood of Silwan yesterday. Image Credit: AP

Ramallah: The Palestinian National Authority lashed out at Israel after it approved 238 illegal Jewish colonist homes in occupied East Jerusalem on Friday.

"It seems to me that Netanyahu has made his choice: settlements [colonies] over peace," Chief Palestinian Negotiator Saeb Erekat said.

Netanyahu's office refused to comment on Friday but the controversial move is certain to further vitiate the atmosphere for direct negotations.

In an unprecedented move last week, the Israeli Knesset passed a controversial "loyalty bill" demanding that Palestinians in 1948 areas pledge allegiance to Israel as a Jewish state. In fact, the bill was referred to by some Jewish members of the Knesset as fascist in nature.

The Palestinians are threatening to quit the negotiations unless Israel reinstates the building restrictions. Israeli Prime Minister Benjamin Netanyahu, however, has refused to do so.

Constant irritants

Both sides have indicated compromise is possible, but attempts by US mediators to break the impasse have failed so far. Israel's new construction announcement further sours the atmosphere. An Israeli announcement earlier this year of new construction in occupied Jerusalem came during a visit by Vice-President Joe Biden, catching the US administration off guard and sparking a crisis in relations between the close allies.

In Cairo, Egypt's foreign minister, Ahmad Abu Al Geit, said yesterday that if Israel continued to build colonies, Arab nations could consider seeking UN recognition of a Palestinian state without Israel's approval. Al Geit said the Arab League's request to the UN on the matter might come as early as next month.

A unilateral declaration of Palestinian independence would have few practical implications, but would serve to increase international pressure on Israel.

- With inputs from AP