The Housing Ministry's decision to go forward with plans to build a new 10,000-unit neighborhood near Atarot in east Jerusalem is a mistake, sources in the Prime Minister's Office said Wednesday. According to the sources, quoted by Army Radio, the time was not right to make such proposals due to the Palestinian negotiating track and US objection to any building in east Jerusalem. Earlier, Prime Minister Ehud Olmert's spokesman Mark Regev downplayed the significance of the plan. "There has been no decision taken, and there is nothing new," he said. Housing and Construction Minister Ze'ev Boim said that his ministry had carried out a "preliminary check", which was motivated by the housing crunch in Jewish neighborhoods. A plan to build thousands of homes on parkland in west Jerusalem, inside Israel, was torpedoed recently by environmental groups, and Boim said that left Israel no choice but to build in east Jerusalem. "The Housing Ministry must provide a solution to the housing shortage in Jerusalem," he said. Even if the planning process moves past the preliminary stage, it will take years for construction to begin. But Palestinians immediately criticized the move, saying it compromised the newly launched peace talks. "Why would Israel opt for dictation instead of negotiations? Why would they destroy the prospect for peace with such activities?" asked Palestinian negotiator Saeb Erekat. Deputy Premier Haim Ramon said he opposed Boim's initiative. It "doesn't help the negotiations and especially our international standing and the international support, especially from the US, which we are striving for at the start of negotiations," he said. Boim acknowledged the timing was "sensitive," but said that was no reason to freeze his office's activities. "The sensitivity is understood, but we must say that unfortunately since Jerusalem was declared Israel's capital there has been no time without similar sensitivities," Boim said. While saying his plan wasn't motivated by a desire to cement Israeli control over parts of the city, Boim also said he believed Israel shouldn't give up sovereignty over Atarot or any part of east Jerusalem. "My opinion is that our sovereignty over Jerusalem can't be divided," he told Army Radio. Earlier this month, Israel approved the construction of over 300 new housing units in the east Jerusalem neighborhood of Har Homa. The Palestinians said the move violated Israel's obligation to freeze settlement activity and endangered the talks.