Reports of Israeli renovation work which started Sunday and will include construction of 14 housing units in a Jewish settlement in disputed East Jerusalem frustrated the Palestinians.

A report by the Peace Now, an Israeli anti-settlement movement, said that the housing units would be appended to a place that has once been used as a post by Israeli police, which overlooks the Muslim holy shrine al-Aqsa Mosque.

The news of the construction plan, which came as Palestinians have just agreed to talk with Israel under a U.S. promise to stop the Israeli "provocations," angered the Palestinians.

Hana Amira, a member of Palestine Liberation Organization (PLO) 's executive committee, which approved on Saturday a U.S. plan to hold indirect talks with Israel, said that the settlement "is part of the provocations that Washington has pledged to take action against."

Amira noted that "there are U.S. promises that no single settlement unit will be built" during the four-month period of the proximity talks, and if the Peace Now report was true, "the negotiations will not start."

The Israeli-Palestinian peace talks stopped when Israel started a military offensive in Gaza last winter and Abbas refused to renew them because Israeli hawkish Prime Minister Benjamin Netanyahu, who took office in early April, did not stop settlement expansion on occupied Palestinian territories.

Earlier Sunday, Saeb Erekat, chief Palestinian negotiator, told reporters that the proximity talks between the two sides have started.

Moreover, Israel Radio reported Sunday that Tel Aviv has not presented any guarantee to the United States that there will be no settlement activities in East Jerusalem during the course of the talks.

Meanwhile, the People Party, a member of the PLO, said the new construction plan in East Jerusalem, which the Palestinians want as their future capital, "reflects the Israeli determination to continue the settlement and destroy the illusions that are called U.S. promises."

Israeli side has not made any comments on this so far.

In Gaza, Islamic Hamas movement said the construction plan "is an Israeli slap on the face of the PLO and its approval of the negotiations."

A statement by Hamas, bitter rival of Fatah party of President Mahmoud Abbas, also blamed the Arab League for giving a greenlight to the U.S. offer.