Egypt has described Israel's building permits for 238 new housing units in East Jerusalem as a provocative step and a sign the direct peace talks could collapse, the foreign ministry said Saturday.

Open gallery view Construction in the West Bank. Credit: Nir Kafri

Foreign Ministry spokesman Hossam Zaki said that Egypt considers this step as a negative Israeli response to all efforts made to save the direct Israeli-Palestinian negotiations.

"The Israeli side withdraws day after another from its commitments to peace efforts, and it clearly prefers to increase the pace of colonial settlement activity in the occupied Palestinian land than to engage seriously in the negotiation," he added.

The building tenders sparked angry Palestinian and U.S. reaction, with worries that the move that could further jeopardize the uncertain resumption of the direct talks.

The Palestinians and their Arab supporters are contemplating turning to the United Nations for recognition of their right to a state within the border of before the 1967 Arab-Israeli war.

