Israel has begun constructing 66 new homes in an east Jerusalem settlement, according to an AFP correspondent who visited the area on Tuesday, in a move likely to anger Palestinians. The development comes as Israel and the Palestinians are engaged in the most serious peace talks in years aimed at solving the thorniest issues of the Middle East conflict, including the future status of Jerusalem. Infrastructure work for new homes is under way in Maaleh Hazeitim, in the Ras al-Amud area of east Jerusalem which Israel occupied and annexed in the 1967 war and which Palestinians want as the capital of their future state. Full Story