Israel and the US are heading for a showdown over construction in Jerusalem's Har Homa neighborhood, as US Secretary of State Condoleezza Rice said Friday that building there does not help create confidence in peace negotiations, and Construction and Housing Minister Ze'ev Boim responded that the construction will continue. Rice, in comments to reporters after her meeting with Foreign Minister Tzipi Livni in Brussels on Friday, said she brought up the issue of a recent tender to build some 307 units in Har Homa with Livni. "I've made [it] very clear, about seeking clarification on precisely what this means," Rice said. "I've made clear that we're in a time when the goal is to build maximum confidence between the parties and this doesn't help to build confidence." Rice said that "there just shouldn't be anything that might try and judge final status, the outcomes of final status negotiations. It's even more important now that we are really on the eve of the beginning of those negotiations." Boim, however, was quoted by Army Radio on Saturday as saying that nothing could prevent the new construction in Har Homa since it was within the capital's municipal borders. "Rice must be commended for her part in setting the peace process in motion, however halting construction in Jerusalem cannot be brought up at every possible opportunity. The Har Homa neighborhood is within the municipal boundaries of Jerusalem, to which Israeli law applies, and therefore there is no obstacle to building there," Army Radio quoted Boim as saying. Palestinian Authority negotiator Saeb Erekat warned on Saturday, according to Army Radio, that if the plan to build the new homes in Har Homa was implemented, "it will ruin all the efforts to reach meaningful negotiations to end the Israeli occupation." Israeli-Palestinian negotiations are to begin on Wednesday with a meeting of a steering committee that is to determine the framework of the negotiations. Erekat also called, in a Voice of Palestine interview, for the US "to act as the judge and compel Israel to implement its commitments" under the road map. Israel, the PA and the US have agreed on the creation of a mechanism, headed by retired US general James Jones, whereby the US would essentially judge when the sides are implementing their road map commitments. The road map calls for an end to all settlement "activity," including for natural growth. While Israel does not consider construction inside Jerusalem's municipal boundaries as settlement building, the US position on this matter has been kept intentionally vague. A source in the Prime Minister's Office responded to the Har Homa issue by saying that tenders for construction in Har Homa were offered on a routine basis. Har Homa is inside Jerusalem, the source said, and the building of units there was according to a government plan and did not need the authorization of the defense minister or the prime minister. The source stressed that the units in question were adjacent to existing units in the neighborhood and "well within the built-up lines." Israel's settlement construction policy in recent years has been that building was permitted inside the built-up areas of settlements inside the large settlement blocs that the government believes will be retained in any agreement with the Palestinians - such as the Ma'aleh Adumim and Gush Etzion blocs. When the US says, as US President George W. Bush did in Annapolis last month, that there should be no settlement expansion, Israel interprets that to mean that there should be no expansion of settlements outside the current construction lines in the major settlement blocs, but that construction inside the built-up lines can continue. On Friday night, referring to Har Homa, Erekat said at the opening of the seventh Hadash Party conference in Nazareth that Israel was "clenching 307 fists at those who attended the Annapolis conference, particularly the Palestinians." During his speech Erekat said that Israel must decide if it was committed to peace or to continued settlement construction, adding that "an unjust peace agreement will not last." Hundreds participated in the ceremony entitled, "A New World is Possible - 30 Years of Struggle," which marked three decades since the party's foundation. The conference was also attended by representatives of the PLO and the Palestinian Authority, including PA President Mahmoud Abbas's adviser Samih Abed al-Fatah. In his speech, Erekat touched on the situation in the Gaza Strip and West Bank. "The Hamas revolution will be stopped when a Palestinian state is established, but if a state is not set up, the situation in the West Bank will become extremely worrying," said Erekat. The Palestinian negotiator also spoke about Israel's demand that it be recognized as a Jewish state. "When Livni made this demand, I asked her why she was making such a request - there are those who say Israel is trying to torpedo the refugee issue before it is discussed," he said. Before Erekat took to the podium, former chairman of the Supreme Arab Monitoring Committee, Shauki Hatib, turned to the Palestinian negotiator and to PA representatives and urged them not to accept the "Jewish state" demand. "Our existence in the margins of everything connected with the state is due to Israel's definition as a Jewish state and we are paying a very heavy price for this. I am giving you the responsibility not to accept the demand of Foreign Minister Livni for such a recognition," he said. Hadash chairman Muhammad Barakei said that "the movement will fight against any population swap plan. We were the first to come out with the slogan of 'Two states for two nations' and just because [Prime Minister Ehud] Olmert and Livni are distorting this slogan, it doesn't mean we have to give it up." During the program, a greeting from Abbas was read which said: "This conference is taking place in a very decisive period for the future of the region, especially after the Annapolis summit that restored the Palestinian rights to the top of the agenda of the world's decision makers." Abbas stressed that the Palestinians would not accept a peace deal without the unification of the entire Palestinian people. "Hamas will understand that in order to return to the negotiations the Palestinian people should be united," he said. Abbas wrote that the Hadash movement was an "exceptional and true leadership of the Palestinians in Israel," adding: "We trust that you will continue to influence Israeli discourse." Another greeting was received from jailed Fatah Tanzim leader Marwan Barghouti. "This gathering is taking place in the shadow of a campaign against Israel's Arab population and there are those who believe that you are a strategic threat that [Israel] must be rid of," he said. Barghouti continued: "Your presence in the homeland is the greatest and most important national treasure for you and the Palestinian people. Your fight for national rights and your contribution with the progressive Jewish movements to ending the occupation is most important." Another greeting was sent by Venezuelan President Hugo Chavez, who wrote that "we must fight against American capitalism."