Olmert stands by settlement building

By Adam Entous

JERUSALEM (Reuters) - Defying U.S. criticism, Israeli Prime Minister Ehud Olmert vowed on Monday not to stop building on occupied land in and around Jerusalem and said peace talks slowed by violence had resumed with the Palestinians.

The United States has called Jewish settlement building near Jerusalem unhelpful and said neither Israel nor the Palestinians were doing nearly enough to meet their obligations under a long-stalled "road map" peace plan.

"There are places in population centres and in Jerusalem where the reality will not be the same in the future as it is today. We are building in Jerusalem because everyone knows that there is no chance the state of Israel will give up on neighbourhoods like Har Homa," Olmert told a news conference with German Chancellor Angela Merkel.

Washington has been especially critical of Israeli plans to build hundreds of new homes in Har Homa, which Palestinians refer to as Jabal Abu Ghneim.

Israel has also pushed ahead with some plans to build within major settlement blocs on land occupied in the 1967 Middle East war, arguing those areas would be part of the Jewish state under any future peace deal.

Palestinians see the building of Har Homa as the last rampart in a wall of settlements encircling Arab East Jerusalem, cutting it off from the rest of the West Bank.

Israel has rejected criticism of building in Har Homa on the grounds that it annexed the land and placed it inside the Jerusalem city boundaries it drew after occupying the West Bank. That annexation is not recognised internationally.

Despite the dispute, Olmert said the lead negotiators, Israeli Foreign Minister Tzipi Livni and former Palestinian prime minister Ahmed Qurie, were resuming their talks.