Israel's decision to approve 1,600 new homes in an ultra-Orthodox East Jerusalem neighborhood is undermining Middle East peace talks, U.S. Vice leader Joe Biden said in Jerusalem on Tuesday.

Earlier Tuesday, the Interior Ministry approved the building of 1,600 new housing units in Ramat Shlomo, with a ministry official saying the plan will expand the ultra-Orthodox East Jerusalem neighborhood to the east and to the south.

"I condemn the decision by the government of Israel to advance planning for new housing units in East Jerusalem," Biden said.

The American vice leader added that the "substance and timing of the announcement, particularly with the launching of proximity talks, is precisely the kind of step that undermines the trust we need right now and runs counter to the constructive agree onions that I?ve had here in Israel."

"We must build an atmosphere to support negotiations, not complicate them," Biden said adding that the "announcement underscores the need to get negotiations under way that can resolve all the outstanding problems of the conflict," Biden said.