U.S. Secretary of State Hillary Clinton on Friday condemned an announcement by Israel this week that it approved plans for new construction in East Jerusalem, saying it sent a deeply negative signal about U.S.-Israeli ties.

The rebuke comes as the U.S. prepares to broker indirect talks between Israeli and Palestinian leaders meant to lead to a two-state solution in the region.

On Tuesday, Israel's Interior Ministry approved a plan for construction of 1,600 housing units beyond the green line which defines Israel's borders before a 1967 war with its neighbors. Palestinians claims the land as theirs.

U.S. Vice President Joe Biden, who was in Israel at the time on an official visit, condemned the move on the same day on behalf of the Obama administration. Before departing from the region on Thursday, however, Biden spoke of the chastisement again, saying only a friend can deliver the hardest truth.

The announcement had angered Palestinian leaders.

Clinton on Friday called Prime Minister Benjamin Netanyahu to tell him that the U.S. considered the announcement to be a deeply negative signal about Israel's approach to the bilateral relationship and counter to the spirit of the vice president's trip ... and had undermined trust and confidence in the peace process, department spokesman P.J. Crowley told reporters, according to the Associated Press.

Netanyahu yesterday said he expressed his regret over the unfortunate timing of the announcement to President Joe Biden, who was in Israel ahead of the talks on an official visit.

The construction project would start in several years if carried out. Netanyahu instructed Interior Minister Eli Yishai to adopt measure to keep such an incident from recurring.