Clinton calls Israeli building plan counterproductive to US efforts to revive peace talks

Secretary of State Hillary Rodham Clinton is criticizing Israel's new construction plans for disputed east Jerusalem as an obstacle to reviving Israeli-Palestinian peace talks.

In remarks at the State Department, Clinton said the U.S. was "deeply disappointed" by the Israeli move. She called it "counterproductive" and said it undermined trust between Israelis and Palestinians.

On Tuesday, President Barack Obama voiced similar criticism of the Israelis' latest building plan for east Jerusalem. The Palestinians hope to make that section of the city the capital of their new state.

Clinton made her comments while announcing $150 million in new U.S. aid to the Palestinian Authority.

The settlement issue is likely to come up again when Clinton meets with Israeli Prime Minister Benjamin Netanyahu in New York Thursday.