US Vice President Joe Biden says he wants the indirect peace talks between Israel and the Palestinians to begin without delay.

He made his comments in a speech at Tel Aviv University in response to news that President of the Palestinian Authority Mahmoud Abbas called off the talks.

Arab League chief Amr Moussa announced the decision after a telephone call from President of the Palestinian Authority Mahmoud Abbas. He says the decision was taken in protest against Israel's plans to build 1,600 homes for Orthodox Jews in occupied East-Jerusalem.

Vice President Biden says the delay will only benefit the extremists and that the talks must go ahead quickly and in good faith. Otherwise the peace process will be undermined.

Israel's intention to restart building in the occupied territories was announced just as the vice president arrived in Israel. The decision was an embarrassment as the indirect talks are meant to lead to new peace negotiations between Israel and the Palestinians under the leadership of the United States.