Israel is looking into building 10,000 new homes for Jews in east Jerusalem, Israel's housing minister said yesterday, angering Palestinians who said the move threatened to hobble fledgling peace talks.

Palestinians want the eastern part of Jerusalem, which Israel captured from Jordan in 1967 and later annexed, for the capital of a future state, and are already furious over another Israeli plan announced earlier this month to add 300 homes in an existing Jewish neighborhood there.

The Housing Ministry has carried out a "preliminary check" into building a new Jewish neighborhood at Atarot, near the Palestinian neighborhood of Qalandia, Housing Minister Zeev Boim said yesterday.