American authorities are concerned that a plan to build thousands of homes in Israel could have negative consequences for the peace process underway between Israeli and Palestinian leaders.

The project includes the construction of 40,000 houses throughout Jerusalem over a 12-year period. Thousands of homes will be built in Jewish neighborhoods in the east part of the city in areas captured during the 1967 Six-Day War.

A large portion of the houses will also be built in Ramat Shlomo, an area just east of Ramot and west of the French Hill. A year ago, the Antiquities Authority found that Ramat Shlomo was once the site of a quarry that supplied the massive stones used to build the Temple Mount.

While visiting Israel, U.S. Secretary of State Condoleezza Rice said such a move would hamper the fragile negotiations of the Israeli-Palestinian peace process.

“I am very concerned that at a time when we need to build confidence between the parties, the continued building and the settlement activity has the potential to harm the negotiations going forward,” she said (Associated Press).

Ms. Rice’s comments were met with severe criticism by Israeli Industry and Trade Minister Eli Yishai.

“I would like to know how it would look if someone would say that the U.S. has no right to develop Washington,” he said. “Rice doesn’t consult with anyone before approving a new city in the U.S.” (Arutz Sheva, Israel National News).

During her visit, Secretary Rice also met with Palestinian Authority President Mahmoud Abbas, who said that Israeli plans to build homes in East Jerusalem would pose the “greatest obstacle” to peace in the Middle East.

Israeli Prime Minister Ehud Olmert told Secretary Rice that there was no stopping the project, that building would continue, and the new Jewish neighborhoods would remain under Israeli control.