Israel is planning to build 1,100 new apartments for Israelis in East Jerusalem, a Cabinet minister said yesterday, angering Palestinians and further straining troubled peace talks.

Housing Minister Zeev Boim told Israel Radio that plans were under way to build 370 apartments in Har Homa and an additional 750 in Pisgat Zeev, two Jewish neighborhoods in east Jerusalem.

An Israeli plan to build an additional 307 apartments in Har Homa two months ago soured the latest round of peace talks just as they were resuming after a seven-year pause.

Israel captured East Jerusalem in the 1967 Mideast War, annexed it, and built new neighborhoods there that are now home to 180,000 Israelis. It does not consider construction there to be settlement activity, as the Palestinians and international community do.

“Construction in Jerusalem continues as usual,” said Gali Cohen, a spokeswoman for Prime Minister Ehud Olmert.

Israel expects to retain East Jerusalem neighborhoods under a final peace deal, but the Palestinians still see construction there as compromising a final agreement.

Olmert and Palestinian President Mahmoud Abbas have set a December 2008 target date for reaching an accord.

Palestinian negotiator Saeb Erekat said the latest construction undermines the chances of meeting that goal.

“We condemn these Israeli declarations, and once again we ask the Israeli government to give peace a chance by stopping all settlement activity,” he said.

East Jerusalem is home to 208,000 Palestinians, according to a recent Palestinian census. The Palestinians hope to establish an independent state that includes the West Bank and Gaza Strip, with East Jerusalem as their capital.

Olmert has signaled he would be ready to cede control of some Arab neighborhoods in Jerusalem.

Hard-line political opponents, and some members of his fractious coalition government, oppose any compromise on Jerusalem, which Israel calls its eternal, undivided capital. As a result, Olmert has to maintain a balancing act — trying to placate the Palestinians by avoiding provocative moves while avoiding the coalition crisis that would ensue if he openly declared a freeze on construction in Jerusalem. Olmert already has declared a partial freeze on construction in the West Bank.

If Olmert openly halts construction in Jerusalem, he risks pushing the hawkish Shas party out of his government and losing his majority in Parliament, said Israeli political scientist Efraim Inbar, director of the Begin-Sadat Center for Strategic Studies at Bar-Ilan University, near Tel Aviv.

And with Israeli public opinion opposed to any compromise in Jerusalem, Inbar said, a move that would be seen as ceding Israeli sovereignty there would be politically disastrous for Olmert.

“Jerusalem is so sensitive that any government that touches it will fall apart,” Inbar said.

The new peace talks, formally launched at a US-hosted peace conference last November, appear to have made scant progress. Negotiations appear to have been conducted so far at an unhurried pace, and have been marred by militants firing rocket barrages at Israeli towns from the Gaza Strip and Israeli raids and sanctions aimed at halting the fire.

The sides’ top negotiators, Israeli Foreign Minister Tzipi Livni and the Palestinians’ Ahmed Qorei, met Monday and yesterday for talks, according to Arye Mekel, a spokesman for Livni.

In Washington on Monday, Palestinian Prime Minister Salam Fayyad, leader of the moderate government in the West Bank, said talks were not moving quickly.

“We just cannot continue to proceed as if things are going or proceeding in line with expectations, because so far they have not, to tell you the truth,” Fayyad said.

In Berlin yesterday, Olmert said talks on Jerusalem — perhaps the stickiest issue in the peace process — would be put off. “We try to move on forward through those issues which can be resolved, perhaps, faster than the others,” he said. “Some other issues are on the agenda, but they will be discussed later, including the issue of Jerusalem.”

In December, after the first Har Homa project threatened peace talks, Olmert told his Cabinet ministers not to approve new building without his approval.

On Monday, Jerusalem city mayor Yair Maayan told a parliamentary panel that the government was holding up construction of hundreds of apartments in Jewish neighborhoods of East Jerusalem.

But Boim denied that construction was being held up, explaining that a written directive from Olmert applied only to settlements in the West Bank. “We are building all over Jerusalem within its municipal borders. What people call delays are in fact final stages of coordination with city hall,” Boim told Israel Radio.

The Housing Ministry has solicited bids from contractors to build the initial 307 units at Har Homa and will move ahead with the new 370 units if there is demand, said Eran Sidis, a spokesman for Boim.

The final details of the planned 750 units in Pisgat Zeev are being coordinated with Jerusalem city officials, he said.