Israeli and Palestinian representatives were prepared Monday to return to the negotiating table for the second time since the Annapolis conference, where Premier Ehud Olmert and President Mahmoud Abbas agreed to resume peace talks.

Regarding the Jerusalem meeting, Palestinian officials said the main subject will be Israel’s plans to build new homes in the West Bank.

This issue was ardently discussed at the first conference after the Israeli government revealed a plan to build 307 new apartments in Har Homa, a neighbourhood in southeastern Jerusalem.

But the number of homes scheduled to be built soared to 500, along with 240 apartments in Ma'aleh Adumim, a city located east of Jerusalem in the West Bank.

Har Homa and Ma'aleh Adumim are considered by the Israeli government “integral” parts of Jerusalem.

This opinion wasn’t shared by the Palestinian side, chief negotiator Saeb Erekat saying there is no need for negotiations if Israel continues with its housing plans.

“Israel has to decide between building settlements and going on the road to peace... It cannot have both,” he said.

In response, the Jerusalem government said Israel has no intention to construct new settlements and existing settlements will not be outwardly expanded. Even so, new buildings would rise inside the boundaries of existing settlements that are considered to be part of Jerusalem.

According to Olmert's spokesman, Mark Regev, a plan proposed by Housing Minister Zeev Boim to build a new neighbourhood in northern Jerusalem was rejected and the decision was communicated to the US Ambassador in Tel Aviv Richard Jones.

Meanwhile, Israeli aircrafts launched a new strike in the Gaza Strip during the early hours. Two Hamas militants were reportedly killed near the central town of al-Bureij.

The Israeli military said Monday’s raid came after militants from the salient launched several rockets at southern Israel Sunday.