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Mideast talks already tangled a month after Annapolis summit

Israeli and Palestinian leaders meet again Thursday as tensions flare over new construction and smuggling from Egypt to Gaza.

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Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas are set to meet Thursday amid rising tensions over whether the promises of peace they made a month ago in Annapolis, Md., can be fulfilled.

The Israeli and Palestinian leaders have quickly met a variety of roadblocks in the process they had pledged to relaunch last month at the summit under US auspices, buoyed by the attendance of other Middle East players.

Fueling the impasse is the ongoing volley of violence between the Israeli military and Palestinian militants in the Gaza Strip, and an Israeli decision to build new homes in Jerusalem's Har Homa neighborhood, which Palestinians refer to as a settlement and call by its Arabic name, Jebel Abu Ghneim.

After the Annapolis summit, Israel's Housing Ministry issued a tender to build more than 300 new housing units in Har Homa, which first began construction 10 years ago under heated controversy. The growing urban development in East Jerusalem is within Israel's self-delineated municipal limits for its capital city, but is over the Green Line – the pre-1967 border between Israel and Jordan – and therefore viewed as a settlement by the international community.

US and Egyptian officials have criticized Israel's move to renew building in Har Homa so soon after Annapolis, indicating that it undermines trust between the parties.

Mr. Olmert's government has gone on the defensive about the decision. On the one hand, it says that the decision to build was made by a lower-ranking official in the Housing Ministry, which issued the tender without Olmert's knowledge. On the other, it says that it has no intention of forfeiting the land of Har Homa to the Palestinians.

"In our view, this is not part of the problem with the Palestinians, we are building in the neighborhoods inside Jerusalem, we are not building new settlements," Defense Minister Ehud Barak said at a meeting with Egyptian President Hosni Mubarek. "The Palestinians are far from implementing phase one of the road map, which calls for rooting out the terror infrastructure."

Palestinian officials say that the building in Har Homa is going to be at the top of the agenda for Thursday's meeting between Olmert and Abbas. Palestinians have demanded a cessation to all settlement building as a requisite step toward rebuilding expectations for peace.

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