US Vice President Joe Biden with Palestinian President Mahmoud Abbas Photo: EPA

US Vice-President Joe Biden ended a three-day visit to the region by saying President Barack Obama had asked him to issue an “immediate and unequivocal” condemnation of the moves.

Mr Biden had hoped his trip would be crowned by the resumption of talks between Israel and Palestinians after a year of stalemate. But he was left humiliated after the surprise announcement on Tuesday of plans for settlement construction in disputed east Jerusalem.

“Our position is simple,” said spokesman Nabil Abu Rudeineh. “The Palestinians and the Arabs accepted the indirect talks.

“It was the Israeli decision to start a new settlement project in East Jerusalem that hindered these talks. The Israelis should revoke these decisions, otherwise it will be difficult and impossible to go back to the negotiations.”

The Palestinians were supported by the 22-nation Arab League which had first raised hopes of negotiations by giving Mr Abbas its backing to restart talks.

Mr Biden attempted to strike a conciliatory tone in his final speech yesterday but warned that Israel’s announcement had “undermined the trust required for productive negotiations”.

“I, at the request of President Obama, condemned it immediately and unequivocally,” he said. “Sometimes only a friend can deliver the hardest truth.”

Benjamin Netanyahu, the Israeli Prime Minister, telephoned the vice-president yesterday morning to “express his regret for the unfortunate timing” of the decision.

He is said to have reiterated his claim that he had not been aware of the announcement, and said he had summoned Interior Minister Eli Yishai to reprimand him.

The final approval process for the settlement would probably take more than a year, with construction starting several years from now, he said.

Palestinians see East Jerusalem as capital of their future state, while Mr Netanyahu considers it part of “the eternal, undivided capital of Israel and the Jewish people”.

President Obama had hoped that by restarting the Israeli-Palestinian process he would persuade Arab states to back tough sanctions to force Iran to give up its nuclear ambitions.

But since his overture to the Muslim world in a speech in Cairo last year he has had little success. Mr Biden’s visit this week was designed to be a closely-choreographed presentation of Washington’s ability to bring Israel into line.

Experts on the region said they could not remember the last time an American leader had used the word “condemn” in relation to Israel.

Aaron David Miller, who worked on peace negotiations for the Clinton administration, said: “If you wanted to create in a laboratory a set of events that was more harmful to American interests you could not have done a better job than this.

“It’s personally embarrassing for the vice-president and it undermines the integrity of the talks, which didn’t have much chance of working anyway.”

Another Washington Middle Eastern expert said the White House had been made to look “weak and hopeless” in its dealing’s with the Israelis and the Palestinians.

In a speech to students at Tel Aviv University on Thursday, Mr Biden pleaded with Israel to do everything necessary to enter negotiations with Mr Abbas and his colleagues.

“Israeli leaders finally have willing partners who share the goal of peace between two states and have the competence to establish a nation. Their commitment to peace is an opportunity that must be seized,” said Mr Biden.

“The most important thing is for these talks to go forward, and go forward promptly and go forward in good faith,” he said.

The Americans initiated the indirect talks because the Palestinians had refused to enter direct negotiations without a full settlement freeze in East Jerusalem.

Israeli officials said was it was “unacceptable” of the Palestinians to make new demands before entering indirect talks as well.

“They are moving the goalposts,” said one Israeli diplomat.