The first round of peace talks following a U.S.-backed Mideast peace conference in Annapolis, Maryland, was held on December 12 and produced no results, with Palestinian President Mahmoud Abbas demanding that Israel drop plans to build new homes in an area near Jerusalem.
The Jerusalem Post said the new round of talks, headed by Israeli Foreign Minister Tzipi Livni and former Palestinian prime minister Ahmed Qurei, could be bogged down again over alleged plans by Israel's construction ministry to build 500 homes in Har Homa (Jabal Abu Ghneim), in East Jerusalem, and 240 in the Maale Adumim settlement.
The roadmap settlement plan proposed by international mediators in the Middle East peace process requires Israel to halt the construction of settlements in occupied Palestinian territories.
However, Tel Aviv insists the requirement does not extend to East Jerusalem - touted as the capital of any future Palestinian state. The Israelis are against the separation of Jerusalem, but have agreed to continue talks on the city's status with the Palestinians.
At the Annapolis conference in November, Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas set the goal of reaching a statehood deal before the end of 2008.
However, it is not clear how such a deal can be implemented, while the Palestinian territories are still divided between Abbas's Western-backed government in the West Bank and a rival
Hamas administration running the Gaza Strip.
Ehud Olmert on Sunday ruled out talks with Hamas until the militant group recognizes Israel, renounces violence and complies with Israeli-Palestinian accords reached earlier.
The Israeli military has recently intensified operations in the Gaza Strip, killing more than 20 Palestinian militants in the past week in retaliation for continuous rocket and shell attacks launched from the enclave.
Meanwhile, the White House said last week that U.S President George W. Bush would make a tour of the Middle East between January 8 and 16 to boost the peace process in the region that had been stalled for seven years.
Press secretary Dana Perino said President Bush would visit Israel, the West Bank, Kuwait, Bahrain, the United Arab Emirates, Saudi Arabia, and Egypt.