Palestinian labourers work on a house under construction in the West Bank Jewish settlement of Har Gilo near Jerusalem December 1, 2009. REUTERS/Baz Ratner

WASHINGTON (Reuters) - The White House called on Monday for Israel to halt construction of new homes for Jews in East Jerusalem and urged Israel and the Palestinians to return to the negotiating table as soon as possible.

“The United States opposes new Israeli construction in East Jerusalem,” White House spokesman Robert Gibbs said in a statement.

Israel announced plans earlier on Monday to build nearly 700 new homes for Jews in areas of the occupied West Bank it considers part of Jerusalem, a city it has excluded from a limited moratorium on settlement construction.

A spokesman for Palestinian President Mahmoud Abbas condemned the plan, saying new building on territory occupied by Israel since the 1967 Middle East war was illegal.

“Neither party should engage in efforts or take actions that could unilaterally preempt, or appear to preempt, negotiations. Rather, both parties should return to negotiations without preconditions as soon as possible,” Gibbs said.

The White House also said the United States recognizes “Jerusalem is a deeply important issue for Israelis and Palestinians, and for Jews, Muslims, and Christians,” and that it believed that through “good faith” negotiations, the aspirations of both parties for the city could be realized.