Israeli Prime Minister Benyamin Netanyahu’s right-wing coalition government has approved the construction of 1,100 new homes in Gilo, an outer suburb of East Jerusalem, on what was Palestinian land.

The provocative decision came just days after Palestinian Authority President Mahmoud Abbas tabled a request for Palestinian statehood at the United Nations, over the bitter opposition of the US and Israel.

In order to stall the bid, the ever-compliant UN called for the resumption of talks between Israel and Palestine, for “comprehensive proposals” on territory and security to be made within three months, and complete a final agreement within a year.

Washington made sure that there was no reference to the settlements in this call, despite Abbas saying that a halt to their construction must be a condition for negotiations, and the UN having previously ruled such settlements illegal under international law.

The position of Washington and Tel Aviv has been gravely weakened by the mass uprisings in the Middle East that have led to the ouster of its long-term allies, Hosni Mubarak and Zine el-Abidine Ben Ali. But even though the UN meeting underscored Israel’s growing isolation, Netanyahu came away jubilant, as commentators noted—having gained everything he wanted from the US and the UN.

In his address to the UN, President Barack Obama had not only opposed the Palestinian bid for statehood. He made no mention of previous calls for Israel to return to its pre-1967 borders and specified that any possibility of a Palestinian state was entirely dependent on Israel’s security needs.

That is why Avigdor Lieberman, Israel’s ultra-nationalist foreign minister told a news conference, “I congratulate President Obama, and I am ready to sign on this speech with both hands”.

As is now clear, the omission of settlements from the UN call, and Israel’s subsequent announcement, has been constructed so as to torpedo any negotiations and to blame the Palestinians for their “intransigence”.

On Sunday, Abbas said that without a freeze talks were unacceptable, while Mohamed Amr, Egypt’s foreign minister, said that the proposal was a “failure” because it was skewed in Israel’s favour.

Saeb Erekat, the Palestinians’ chief negotiator, condemned the new settlements, saying that Israel “gave 1,100 answers of saying no to the effort of the international community to open doors to negotiation, and I think speaks clearly that Israel is not interested in negotiating with us--in spite of the fact they say they would like to do so”.

The US and European powers have issued only the most perfunctory criticisms of Israel’s announcement, saying it would complicate efforts to renew peace talks.

The European Union expressed its “regret” and called on Netanyahu to reverse the decision. Hillary Clinton, the US Secretary of State, called the new settlement building “distressing” and “counter-productive”. But this was just a token slap on the wrist for public consumption.

On Tuesday, State Department officials held talks with Michael Oren, Israel’s ambassador to Washington. But as State Department spokesperson Victoria Nuland explained to reporters, the meeting had been previously scheduled, meaning that Oren had not been “summoned” to the State Department, which would have indicated diplomatic displeasure. She likewise refused to say whether Israel had given Washington any advance warning about Gilo’s expansion.

Egypt’s Foreign Minister Amr, on a visit to Washington, condemned Israel's announcement. He said, “This illegal measure represents a new and glaring Israeli defiance to the international community, which endeavours to restore credibility to the peace process”.

He added, “Egypt is really worried over the steady rise in the pace of settlements construction, especially in the past two months when the building of more than 6,000 homes has been approved”.

Cairo’s 32-year long support for Israel, which is continuing under the military council that seized power after former president Hosni Mubarak’s ouster in February, is massively unpopular with the Egyptian people. It has already led to demonstrations calling for the expulsion of Israel’s ambassador, the repudiation of its treaty with Israel, the evacuation of Israel’s embassy staff for their own safety, and threatens to coalesce with the broader social, economic and political opposition to the junta.

During talks with Amr, Clinton praised the military junta “as an institution of stability and continuity”, and called on Egypt to maintain and strengthen its relations with Tel Aviv.

Israel for its part brushed off all concerns that its plans for 1,100 new homes in Gilo could further destabilise the Middle East. Mark Regev, Netanyahu’s spokesman, said, “Gilo is not a settlement nor an outpost. It is a neighbourhood in the very heart of Jerusalem about five minutes from the centre of town”.

The facts show otherwise. Israel, after capturing the West Bank and East Jerusalem in the 1967 war and in defiance of international law, immediately annexed Arab East Jerusalem. In 1970, it further extended the boundaries of Jerusalem to incorporate even more Palestinian land, including the land on which Gilo is built. Its purpose was to build a ring of new neighbourhoods around East Jerusalem that would separate the city from the rest of the West Bank and thus make Jerusalem a predominantly Jewish city.

With a population of 40,000 people, mainly recent immigrants, both secular and religious, the expansion of Gilo has formed a wedge between Jerusalem and Beit Jala-Bethlehem, effectively cutting the West Bank in two. As such, it makes it almost impossible for any putative Palestinian state to claim even a small part of East Jerusalem as its capital.

Regev made it quite clear that the Israelis had never been serious about a Palestinian state. He claimed that Gilo had been part of every peace plan on the table over the past 18 years and it “stays part of Jerusalem and therefore this planning decision in no way contradicts” the aim of a Palestinian state.

Netanyahu, in an interview with the Jerusalem Post, added insult to injury. He refused any moratorium on settlement construction and added that he was streamlining the approval process for settlement expansion.

In the meantime, Israel has placed reservists on standby in case of a Palestinian uprising, and has provided Israeli settlers with tear gas and stun grenades and trained them in their use to disperse demonstrators that approach the settlements. Since the settlers have a long history of murderous provocations against Palestinians, carried out under the protection of Israel’s security forces, this signifies that Israel is preparing for all out war against the Palestinians.

Israel is also ramping up its rhetoric against Cairo, accusing it of failing to control Egypt’s border with Israel along the Sinai desert against Palestinian militants operating out of Gaza and Egyptian oppositionists. The army has put its troops on high alert following six attacks on the pipeline that carries gas to Israel and Jordan and attacks on Israel that killed eight Israelis in three separate incidents near the southern city of Eilat in August.

Yasser Othman, the Egyptian Ambassador to the Palestinian Authority, told the Palestinian news agency Ma'an that he believes Israel is preparing to take control of the Sinai Peninsula.

Israeli officials were attempting to give the impression that Egypt was no longer capable of controlling its border with Israel, he said, in order to create a pretext for such a move.