Israel Friday announced its second settlement project in occupied east Jerusalem in a month, enraging Palestinians just ahead of a US visit aimed at rescuing the stalemated peace process. The Jerusalem municipality confirmed a report in the Haaretz newspaper that the green light had been given for 1,300 new homes for Jewish settlers in the occupied and annexed east of the city. The houses will be built in Ramat Shlomo in the northern part of the city where there are already 2,000 settler homes, Haaretz newspaper reported. The paper said the decision to go ahead was taken Tuesday by the Jerusalem urban planning commission which reports to the interior ministry. Haaretz called it one of the most ambitious expansion plans for settler homes in east Jerusalem, which was captured by Israel in the 1967 and later annexed in a move not recognized by the international community. Palestinian negotiator Saeb Erakat expressed outrage at the decision. “We firmly condemn this project which reveals the Israeli government's intention to destroy peace,” Erakat said. “The international community must make Israel stop its settlement activity if it wants to give peace negotiations a chance.” The new project will nearly double the number of homes in Ramat Shlomo. “These 2,000 housing units intended for young couples and those currently in poor housing are an absolute necessity,” Jerusalem municipality spokesman Gidi Schmerling said in a statement. The settlement requested permits for close to 2,000 units, but so far 1,300 have been approved, Schmerling added. On June 2, after Israel announced plans to construct 884 more houses in East Jerusalem, the White House warned that building such settlements “exacerbates the tensions” with the Palestinians. In Washington, State Department spokesman Sean McCormack said, “We understand this kind of activity does not help the atmosphere between the Israelis and the Palestinians.” He was speaking a day before Secretary of State Condoleezza Rice is due in Jerusalem to try to help revive the moribund peace process, under which Israel has committed itself to freezing settlement activities. “We have made our views clear about settlement activity and the Israelis abiding by their roadmap commitments,” McCormack added. UN Secretary General Ban Ki-moon also said he was deeply concerned at the move which is “contrary to international law.” In Paris on Friday, US President George W Bush said he remained confident a Middle East peace deal could be reached in 2008. “I firmly believe that, with leadership and courage, a peace agreement is possible this year,” he said in a speech at the headquarters of the Organization for Economic Cooperation and Development.