Israel’s interior minister gave final authorization to build 1,600 apartments in Palestinian East Jerusalem and will approve 2,700 more in coming days. Adding further damage to the beleaguered “peace process,” the settlement authorization prompted senior Palestinian official Saeb Erekat to accuse Israel of favoring settlements over peace.

These new settlements are in addition to the recently announced 930 new Israeli homes to be built in a separate neighborhood in East Jerusalem.

The move is probably an effort to placate the massive protests taking place in Israel over the high cost of housing and to admonish the Palestinian bid to seek U.N. recognition in September. But the aggressive decision is unlikely to resolve either issue for the Israeli government.

These additional illegal settlements come after a dramatic escalation in demolitions of Palestinian homes throughout the West Bank, described as “alarming” by a July report from the United Nations. The report said that 700 people had been displaced and 356 structures demolished so far this year, compared with 594 and 431, respectively, for the whole of 2010.

Rhetorically at least, the United States is opposed to continued expanding settlements in Palestinian territory. U.S. Embassy spokesman Kurt Hoyer said Jerusalem’s fate “needs to be negotiated between the two parties” and that “unilateral actions on either side that appear to prejudice the outcome of those negotiations we find counterproductive.”

But in deed, the U.S. fully supports Israeli actions in the occupied territories, while also continuing to provide enthusiastic diplomatic support for Israeli policies quashing Palestinian rights.

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