US Secretary of State Hillary Clinton has criticized Israel’s decision to authorize the construction of 3,000 more housing units in occupied East Jerusalem and the West Bank, saying that “these activities set back the cause of a negotiated peace”. The White House had earlier described the proposal as “counter-productive”. Addressing a Washington audience that included Israel’s Defense Minister Ehud Barak and Foreign Minister Avigdor Lieberman, Clinton said the vote “should give all of us pause. All sides need to consider carefully the path ahead”. The Palestinians had to be persuaded, she said, that negotiations with Israel were the only path to an independent state. It was in Israel’s interest, she added, to make generous steps towards Palestinians in the West Bank as a bulwark for Israeli security, “whether or not there is a comprehensive agreement in the near future”. The US State Secretary was having talks late on Friday with both Israeli ministers who were attending the Washington forum as well as Palestinian Prime Minister Salam Fayyad. The Israeli decision followed a UN General Assembly vote to upgrade the Palestinians’ status to non-member observer state. Thursday’s UN motion was carried by 138 votes to nine with 41 abstentions. Israel and the US voted against the proposal. Plans to build settlements in the area, known as E1, are strongly opposed by Palestinians, who say the development will cut the West Bank in two, preventing the creation of a contiguous Palestinian state. About 500,000 Jews live in more than 100 settlements built since the occupation of the West Bank and East Jerusalem. The settlements are considered illegal under international law, though Israel disputes this. Israel’s former Foreign Minister Tzipi Livni, who has launched her own political party ahead of January elections, said the decision to build thousands more housing units “as punishment to the Palestinians only punishes Israel”