US halts visit as rift widens with Israel

The rift in US-Israel relations deepened after an American envoy cancelled a visit and Jerusalem insisted it would not back down over building plans at the heart of the row.

Meanwhile hundreds of Palestinians hurled stones at police and started fires across the holy city's volatile eastern sector, where the construction is planned. Plumes of black smoke billowed and the air reeked of tear gas in the heaviest clashes in the city in months.

Youths in one east Jerusalem neighbourhood hoisted a giant Palestinian flag and shouted, "We'll die in Palestine, Palestine will live."

The diplomatic crisis erupted last week after Israel announced during a visit by US vice president Joe Biden that it would build 1,600

apartments for Jews in disputed east Jerusalem.

The announcement enraged Palestinians, who have threatened to bow out of US-brokered peace talks.

Foreign Minister Avigdor Lieberman said demands to halt Israeli construction "are unreasonable" and predicted the row with the US would blow over, saying neither side had an interest in escalation.

But Washington told Israel yesterday that envoy George Mitchell had put off his trip indefinitely. Mr Mitchell had planned on wrapping up preparations for relaunching Israeli-Palestinian peace talks. But now it is not clear when the indirect talks will begin.