The United States clarified to Israel during U.S. President George Bush's visit this week that it disapproves of all building in East Jerusalem and the West Bank - including in the large settlement blocs, a senior Western diplomat said Tuesday.

The diplomat added that Israel and the U.S. differ on their interpretation of the letter President Bush sent to former prime minister Ariel Sharon in April, 2004.

"The letter refers to major population centers and not the settlement blocs, while stressing that everything must also be decided in the negotiations between the Israelis and the Palestinians," the diplomat said.

According to the diplomat, Bush is steadfast in his objection of building in West Bank settlements and East Jerusalem.

"The American government also opposes constuction due to the natural growth of the present settlers", he said. He added, however, that if progress is made on border issues it may help to resolve the settlement issue. "When the route of the permanent border becomes clearer, the locations where Israel can and cannot build will also be clearer."

The diplomat also said that the U.S. supports the opening of the Gaza checkpoints, especially the Karni crossing, by manning them with forces subordinate to Palestinian Prime Minister Salam Fayyad.

"The Bush administration is willing to examine creative ideas", the diplomat said, "the goal is to destabilize Hamas and the opening of checkpoints for the transfer of good would advance this goal."

Israel begins constructing 60 new homes in East Jerusalem
Meanwhile, construction has begun on another 60 housing units in the Jewish neighborhood of Maaleh Hazeitim, in East Jerusalem's Ras al-Amud section.

Fifty-one Jewish families already live in the small neighborhood, built on land purchased 15 years ago by the American millionaire Irwin Moskowitz, patron of the Ateret Cohanim organization.

The neighborhood's initial construction provoked an international storm in September 1997, and the United States pressured Israel not to go ahead with the plan. The pressure was rebuffed by former prime minister Benjamin Netanyahu, and backed by Jerusalem's mayor at the time, Ehud Olmert.

The new construction, with a municipal permit, is being carried out by Kedumim 3000, a company headed by Nachman Zoldan, father of Ido Zoldan who was murdered two months ago in a terror attack near Kedumim.

Right-wing activists ascribe great significance to widening Jewish construction in Ras al-Amud, and to realizing ownership of lots and buildings that it has managed to acquire in recent years in that vicinity.

According to their thinking, Maaleh Hazeitim makes it harder to create a Palestinian territorial corridor, a sort of "safe passage" between the West Bank to the east, and the Temple Mount.

In the past, Israeli-Palestinian talks included the idea of establishing such a corridor running through the old Jericho road, the Mount of Olives region, Motta Gur Street, up to the Lion's Gate and to the Temple Mount.