By I-Hsien Sherwood | i.sherwood@latinospost.com (staff@latinospost.com) | First Posted: Dec 01, 2012 04:11 PM EST

Only a day after the United Nations overwhelmingly recognized Palestine as a sovereign state, Israel approved the building of settlements in a contested area east of Jerusalem.

Most American officials see the move as punishment for the vote.

The United States was one of the few countries that sided with Israel in opposing Palestinian statehood, but Secretary of State Hillary Clinton condemned Israel's response.

"These activities set back the cause of a negotiated peace," said Clinton.

"We reiterate our longstanding opposition to settlements and East Jerusalem construction and announcements," said Tommy Vietor, a spokesperson for the National Security Council.

"We believe these actions are counterproductive and make it harder to resume direct negotiations or achieve a two-state solution."

The presence of Jewish settlements in areas under Palestinian control has been an issue of extreme contention between Israel and the Palestinian Authority.

The Americans view the settlements as an unnecessary provocation of the Palestinians, calling it counterproductive and a roadblock to peaceful negotiations.

"Even if you cannot reach complete agreement, it's in Israel's interest to try, said Clinton.

"It gives Israel a moral high ground that I want Israel to occupy. That's what I want Israel to occupy."

Even Israeli officials are skeptical that the push for more settlements is the right course of action.

"A number of important countries are telling us that they think it's wrong to do settlements, and these are our best friends," said one senior Israeli government official, speaking to The New York Times on condition of anonymity.

"After they say this directly or indirectly, the immediate response is to build more settlements, even in one of the most controversial areas. E1? How does that make sense? What is the message the government is sending its best friends?"

The settlements are planned for a 4.6 square mile area to the east of Jerusalem. If they are built, they will separate the Palestinian cities of Ramallah and Bethlehem, making a contiguous Palestinian state all but impossible, an outcome the Palestinian Authority will never accept.

But there is speculation that the settlements are simply a bargaining chip. Israeli leaders know most of its allies do not support the building of additional settlements, so the move may simply be a demonstration by the Israelis that their needs are not to be taken lightly.

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