Arab states have withdrawn their support to indirect proximity talks between the Palestinians and Israel after the latter approved plans to expand a Jewish settlement in East Jerusalem, a Palestinian official said Wednesday.

"Some Arab countries told the U.S. administration that the Arab League (AL)'s decision regarding the indirect talks is no longer existed," Yasser Abed Rabbo, a member of the executive committee of Palestine Liberation Organization (PLO), told Voice of Palestine radio.

Last week, the AL approved that Washington leads the proximity talks in a bid to restart the peace process between Israel and the Palestinians. The negotiations have been stalled since December 2008.

However, as U.S. Vice President Joe Biden was in the region to help starting the indirect negotiations, Israel announced on Tuesday that it would build 1,600 houses for Jews near the Arab Shu'fat area in East Jerusalem, the disputed city which Palestinians see as their future capital.

Palestinian President Mahmoud Abbas, who is meeting Biden in Ramallah on Wednesday, called on the AL to respond to the new construction approvals on Tuesday night.

The approval outraged the Palestinian National Authority (PNA) since the building of settlements in the occupied territories was the central obstacle that kept peace negotiations stalled.

Abed Rabbo said the new decisions were a message from Israel that the presence of Biden "would not help stop settlements," urging the United States "to take action against Israel's policy."