Clinton Calls Israeli Settlement Expansion in East Jerusalem 'Counterproductive'

WASHINGTON -- Israel's announcement of 1,100 new housing units in east Jerusalem is counterproductive to the Mideast peace talks, Secretary of State Hillary Clinton said Tuesday, urging both sides to avoid any provocative action just days after the Palestinians submitted a unilateral bid to the United Nations seeking statehood recognition.

Speaking to reporters in Washington alongside her Portuguese counterpart, Clinton suggested that both sides focus on ways to get back to the negotiating table.

"We believe that this morning's announcement by the government of Israel approving the construction ... is counter-productive to our efforts to resume direct negotiations between the parties," Clinton told reporters at a news conference.

"We have long urged both sides to avoid any kind of action which could undermine trust, including, and perhaps most particularly, in Jerusalem, any action that could be viewed as provocative by either side," she said.

She warned that in the absence of negotiations, which have been stalled for nearly a year, there are going to be perceptions on both sides that the other side is not willing to work.

State Department spokeswoman Victoria Nuland repeated the "counterproductive" assessment but did not call the action "provocative." She added that the quartet of nations tasked to negotiate a peace deal offered a set of recommendations for a timetable for preliminary talks in one month and a comprehensive set of proposals from both sides in three months.

Israeli Prime Minister Benjamin Netanyahu ruled out any freeze in settlement construction on Tuesday. The Palestinians are demanding such an overture to return to talks, however, the quartet has not made the end of settlement-building a precondition for meeting.

The U.S. has been hoping for a quick resumption in peace talks to divert attention away from the Palestinian bid to win statehood at the U.N. The Security Council will discuss the Palestinian Authority's application on Wednesday morning, when it plans to refer it to the committee tasked with examining such requests.

On Monday, the council held closed-door discussions on the application, which PA President Mahmoud Abbas officially submitted to Secretary-General Ban Ki-Moon last Friday. Ban then forwarded the request to the council.

Any recommendations for admission must receive the affirmative votes of nine of the council’s 15 members, provided that none of its five permanent members -- China, France, Russia, United Kingdom and United States -- vote against the application. The U.S. has vowed to veto the statehood bid, though it may not have to resort to this because so far it seems that at most eight countries would vote "yes," one short of approval of the statehood application.

The Security Council's statehood review committee is likely to report back to council ambassadors on their findings on Friday.

Fox News' Jonathan Wachtel contributed to this report.