Curb settlements, Obama tells Israel

* EU 'dismayed' at Jerusalem settlement expansion


* Russia calls Israeli plan 'unacceptable'


* Tel Aviv fends off criticism




WASHINGTON: US President Barack Obama put fresh pressure on Israel on Wednesday to curb its settlement projects, saying continued building could lead to a dangerous situation with embittered Palestinians.




The Swedish EU presidency also voiced dismay on Wednesday after Israel backed the expansion of Jewish settlements in Arab east Jerusalem, while Russia said the Israeli decision was "unacceptable" for the peace process.




"I think that additional settlement building does not contribute to Israel's security, I think it makes it harder for them to make peace with their neighbours," Obama told Fox News. "I think it embitters the Palestinians in a way that could end up being very dangerous."




Obama has made achieving peace between Israelis and Palestinians a top priority among a long list of foreign policy goals, but progress in restarting talks between the two sides has been scant. On Tuesday the White House said it was dismayed over Israeli approval to expand the Gilo settlement in Jerusalem. Israel approved the building of 900 homes for Jews on West Bank land it occupied in the 1967 Arab-Israeli war and annexed to its Jerusalem municipality.




EU dismayed: Also on Wednesday, the EU presidency said it was "dismayed by the recent decision on the expansion of the settlement of Gilo", one of a dozen Jewish settlements in east Jerusalem. The EU presidency, held by the Swedes till the end of the year, stressed that "settlement activities, house demolitions and evictions in East Jerusalem are illegal under international law". "The actions taken by the Israeli Government contravene repeated calls by the international community ... and run counter to the creation of an atmosphere conducive to achieving a viable and credible solution to the conflict between Israelis and Palestinians," the statement added. "If there is to be genuine peace, a way must be found to resolve the status of Jerusalem as the future capital of two states," it concluded.




Unacceptable: The Russian Foreign Ministry, separately, said, "Moscow reacts to these [settlements expansion] announcements with extreme concern. In a statement on Wednesday, the ministry called the Israeli plan "unacceptable for the Middle Eastern peace process".




Israel defiant: Israeli Interior Minister Eli Yishai defended his ministry's decision to approve the construction of new housing units. "Freezing construction in Gilo is just like freezing construction ... in any other neighbourhood in Jerusalem and Israel," Yishai told AFP. "Construction in Jerusalem cannot be halted, and Gilo is in Jerusalem."




In another move likely to exacerbate tensions, Israel demolished an illegally built house in east Jerusalem. "The house was destroyed because it was built without planning permission," said a spokesman for the Israel's Rabbis for Human Rights. agencies