On the eve of his trip to Washington, Prime Minister Ehud Olmert took a firm stand in defense of a peace process that included construction in east Jerusalem, even as Palestinian officials warned that he was jeopardizing that process. "I believe there is no contradiction between the people of Israel's total allegiance to Jerusalem and its unity and our ambitions to create peace within it," he said Monday evening at a celebration to honor the 41st anniversary of the reunification of the city. It was a reiteration of a stance he took earlier in the day during a two-hour meeting between Palestinian and Israeli officials, including Foreign Minister Tzipi Livni. The talks came a day after the government announced plans to build nearly 884 housing units in the Jerusalem neighborhoods of Pisgat Ze'ev and Har Homa, both located over the Green Line. Palestinian Authority officials told The Jerusalem Post that PA President Mahmoud Abbas warned during his meeting with Olmert that Israel's "policy of settlement" was jeopardizing the peace process. The officials said Abbas objected to the decision to build those units and demanded that Israel refrain from demolishing West Bank houses that were built without permits. "The policy of settlement construction was high on the agenda of the talks," said a PA official in Ramallah, adding that Abbas did not sense real change in the Israeli position. Ahmed Abdel Rahman, a senior Fatah official and close aide to Abbas, said the Palestinians were growing impatient with the lack of progress in the peace talks. "There's a limit to how much we can negotiate," he said. "We have given the talks a chance, but to no avail. We are giving peace a chance, but not forever. We know how to defend our rights and lands." Yasser Abed Rabbo, a senior adviser to Abbas, accused Israel of seeking to divide the West Bank into "cantons" and accused Israel of working to "isolate" east Jerusalem from the West Bank by expanding Jewish neighborhoods in the city. Abed Rabbo said Israel's "strategic goal" was to prevent the establishment of a Palestinian state. "The talk about a two-state solution is an illusion and a lie spread by Israel," he added. "Israel's practical goal is to prevent the establishment of a Palestinian state." The US urged Israel on Monday to reconsider its decision to build new housing over the Green Line. "Our position on the settlements is that... we don't believe that any more settlements should be built. And we know that it exacerbates the tensions when it comes to the negotiations with the Palestinians," White House spokeswoman Dana Perino said on Monday. "We know that, even if it is a settlement that exists, and there's expansion of that settlement, that that is part of the problem, in terms of Palestinians feeling that that is not acting in good faith when it comes to their negotiations," she continued, adding that "obviously, the Israelis see it from a different point of view." "That is one of the very difficult issues, along with the right-of-return issue, that they're going to have to work out," Perino said. Olmert's spokesman, Mark Regev, defend ongoing construction in east Jerusalem. "There is nothing new in what Israel is doing," Regev told the Post. Regev said he believed there was international consensus that these neighborhoods would remain under Israeli control in any final status agreement and thus construction there was not an issue. During Monday's meeting, Olmert and Abbas "reiterated their commitment to the Annapolis framework" and to "reach a historic agreement by the end of this year," Regev said. According to a PA official, Abbas expressed hope that the new corruption case against Olmert would not affect Israeli-Palestinian negotiations. He said Abbas called for the release of Palestinian prisoners and sought permission to deploy additional PA policemen in Palestinian cities. Chief PA negotiator Saeb Erekat said Abbas also renewed his call to allow Palestinian gunmen who were deported from Bethlehem several years ago to return to their homes. In addition, he said, Abbas demanded that Israel remove more West Bank checkpoints; called on Olmert to accept Egypt's initiative for a truce between the Palestinians and Israel; and lift the blockade imposed on the Gaza Strip. According to Regev, the Palestinians were briefed on Israel's ongoing talks with the Egyptians to achieve a cease-fire with Hamas. "We [also] updated them on the talks with the Syrians and they expressed their full support for that track," Regev added.