WASHINGTON // The US secretary of state, Hillary Rodham Clinton, announced today that the US is to transfer $150 million (Dh550m) in new aid to the Palestinian Authority.
Mrs Clinton also criticised Israel's new construction plans for East Jerusalem saying they were an obstacle to reviving peace talks.
Mrs Clinton, speaking from the State Department, said the US was "deeply disappointed" by the Israeli move. She called it "counterproductive" and said it undermined trust between Israelis and Palestinians.
President Barack Obama voiced similar criticism yesterday of the Israelis' latest building plan for East Jerusalem. The Palestinians hope to make that section of the city the capital of their new state.
The settlement issue is likely to come up again when Mrs Clinton meets with Israeli Prime Minister Benjamin Netanyahu in New York tomorrow.