Vice Premier Haim Ramon signaled on Sunday that Israel intends to hold on to all Jewish neighborhoods in east Jerusalem, including Har Homa, where Israel plans to build 307 new housing units, a plan that has drawn scathing US criticism. Ramon said Israel should make it clear that it intends to turn over Arab neighborhoods of the city to Palestinian control, but would retain Jewish neighborhoods, including those built in east Jerusalem. "When we have a clear-cut policy that says Arab neighborhoods that were never part of Jerusalem won't be part of Jerusalem and that all Jewish neighborhoods, including Har Homa, will be part of Jewish Jerusalem, then I imagine the United States, too, will understand that position," Ramon told Army Radio. Palestinian Foreign Minister Riad Malki denounced Ramon's statement and its timing: On Wednesday, negotiating teams from both sides are to sit down together for their first formal talks in seven years. "These statements place obstacles before any serious attempts by Palestinian negotiators on Jerusalem," Malki said. "They aim to create confusion and change the course of negotiations before they begin. They try to pressure Palestinians and the international parties to think of Israeli needs before they begin." Israel's announcement last week that it would go ahead with plans to build 307 apartments in Har Homa fueled Palestinian accusations of bad faith - and a denunciation from US Secretary of State Condoleezza Rice, who said the decision wouldn't "help to build confidence" between the two sides. Jerusalem on Sunday roundly rejected the US criticism. Kadima MK Otniel Schneller had some strong words for the US administration, saying that Rice was "alienating wide sections of Israeli society" regarding the peace process. "The criticism proves that the US is with one hand building an important tower of political initiatives and with the other hand knocking it down with radicalization and a lack of understanding of Israeli sentiments, thereby jeopardizing the national majority agreement required for a peace deal," Schneller told Army Radio.