Israel will never agree to limit its construction activity in annexed east Jerusalem, Foreign Minister Avigdor Lieberman said on Sunday.
"One thing should be clear: we will never accept the definition of building in Jewish neighbourhoods of Jerusalem as settlement activity," he said at a news conference with his German counterpart Frank-Walter Steinmeier.
"We won't accept any limitation on building in Jewish areas of (east) Jerusalem," he said.
His remarks came four days after Israel approved plans to build 200 homes in Ramot in annexed east Jerusalem despite months of almost daily clashes and tensions there with Palestinians, triggered in part by settlement expansion.
The announcement prompted a sharply-worded rebuke from Washington which reiterated its "unequivocal" opposition to such construction in east Jerusalem, warning it could "exacerbate this difficult situation on the ground and... will not contribute to efforts to reduce the tension."
Sources close to the German minister said the issue of Israel's ongoing settlement was a central theme in their talks, which also touched on the need to resume talks with Palestinians to end the conflict.
At a meeting with Israeli President Reuven Rivlin later in the day, Steinmeier expressed his "hope" peace talks would be renewed, while warning against unilateral measures of both sides.
"Unilateral decisions pose an obstacle to the success of negotiations," he said in remarks relayed by Rivlin's office.
Palestinians oppose any Israeli attempt to expand construction there.
*This story was edited by Ahram Online.