"Israel's approval for building 1,600 new housing units for ultra-Orthodox Jews in East Jerusalem has infuriated the Palestinians...The Israeli anti-settlement group Peace Now condemned the new project, saying it would 'widen the gap with the Palestinians and the two-state solution, which risks becoming obsolete.' " Palestinians had planned for East Jerusalem to be the capital of their new State.
http://english.aljazeera.net/news/middleeast/2010/03/2010311111231607838.html
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