In an about-face from a day earlier, Israel's housing minister yesterday said he never intended to pursue a massive construction plan for east Jerusalem that sparked Palestinian outrage and a chilly reception from Israeli Prime Minister Ehud Olmert.

Palestinians want Jerusalem's eastern sector, which Israel captured from Jordan in 1967 and later annexed, for the capital of a future state. They view any plans for new Israeli construction there as undermining newly relaunched peace talks.

On Wednesday, Housing Minister Zeev Boim said his ministry was looking into building a new Jewish neighborhood with 10,000 apartments in east Jerusalem to ease a housing crunch in the city.