NEW : U.S. , Palestinian sources confirm Israel provided advance notice of plans . The new construction would be in the neighborhoods of Ramot and Benjamin Netanyahu . Palestinians want East Jerusalem as the capital of their future state . Israel 's Prime Minister Pisgat Ze'ev was informed of the move . Israeli negotiator says Israeli prime minister has chosen `` settlements over peace ''
NEW : U.S. , Palestinian sources confirm Israel provided advance notice of plans . The new construction would be in the neighborhoods of Ramot and Benjamin Netanyahu . Israel 's Prime Minister Pisgat Ze'ev was informed of the move . Israeli negotiator says Israeli prime minister has chosen `` settlements over peace ''