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Prospects for indirect peace talks lay in tatters on Thursday after the Palestinians said they would not negotiate with Israel unless it reversed plans to build 1,600 settler homes in east Jerusalem.
The move came following a similar decision by the Arab League as international pressure mounted on Israel after the project was announced during a visit by US Vice President Joe Biden aimed at promoting the talks.
Palestinian president Mahmud Abbas said he could not go through with the indirect talks that the Palestinians had reluctantly agreed to on Sunday unless the new housing project was cancelled, his top negotiator told AFP.
"I am waiting for (US Middle East envoy George) Mitchell to come back next week to give us the answer that the decision has been cancelled,"