The Middle East 'Quartet' - the European Union, the United States, Russia and the United Nations - has condemned Israel's decision to build a further 1,600 settler homes in East Jerusalem, saying the move undermines peace talks with the Palestinians. The Quartet described the plan as unacceptable.

Separately, US Secretary of State Hillary Clinton warned Israeli Prime Minister Benjamin Netanyahu that his refusal to engage in serious talks with the Palestinian Authority could jeopardise Israel's relationship with Washington.

Brazilian President Luiz Inacio Lula da Silva, who is to travel to the Middle East on Monday, says he hopes to mediate in the conflict. Speaking ahead of his departure, President Lula said the peace effort requires "someone with neutrality to speak the truth to the Israelis, to tell the truth to Palestinians, Iranians, Syrians, and whoever wants to hear the truth". The Brazilian president will meet both Israeli and Palestinian leaders.