The United States on Monday criticized the Israeli government for planning to build more Jewish settlements in East Jerusalem, saying the move undermines Washington's efforts for the resumption of peace talks between Israel and the Palestinians.

The United States has "relayed our strong concerns" to the government of Israel, State Department spokesman Philip Crowley told reporters, adding that the settlement activities are "counter- productive" and undermine "trust between the parties."

The Israeli government has reportedly approved 600 new homes, 500 less than a previous plan set in the past year, for the East Jerusalem settlements Pisgat Ze'ev.

"...we understand the total number of units has been reduced from the original plans we also understand that this is not a final approval for the project but as a step in that direction," Crowley noted.

The Jewish neighborhoods in East Jerusalem, captured by Israel in 1967 and later annexed, are considered by the international community as Israeli settlements and one of the main obstacles to the Israeli-Palestinian peace process.

The status of Jerusalem remains one of the core issues in the Israeli-Palestinian conflict. Israel's annexation of East Jerusalem has not been internationally recognized, and the Palestinians want East Jerusalem to be the capital of a future Palestinian state.

Israeli Prime Minister Benjamin Netanyahu announced a 10-month freeze on construction in the West Bank settlements last October. However, Netanyahu stressed that the construction limits would not be implemented in the predominantly Arab East Jerusalem.

The Obama administration has been tired of pushing the Israeli government and the Palestinian National Authority (PNA) to relaunch the long-stalled peace talks.

PNA Chairman Mahmoud Abbas insists that the talks should not resume until the Israeli government totally freezes the Jewish settlement construction, while the Israeli side accuses the PNA of setting preconditions for the peace talks.

At least 450,000 Israelis live in more than 100 settlements in the West Bank, including more than 200,000 in East Jerusalem.