RAMALLAH, West Bank – Vice President Joe Biden told Palestinian leaders on Wednesday that Washington will hold accountable any side that hurts peace prospects, pointedly citing Israel's settlement expansion plans.

He also pledged U.S. support for a viable Palestinian state and put his full weight behind indirect talks the Palestinians reluctantly agreed to hold with Israel after a 14-month hiatus in peace negotiations.

"I promise you, Mr. President," he said, turning to Palestinian leader Mahmoud Abbas, "the United States will also stand with those who take the risks that peace requires."

Speaking to journalists after his talks with Abbas, Biden strongly condemned Israel's approval of the construction of 1,600 settler homes in annexed Arab east Jerusalem, which was announced while he held talks with Israeli leaders on Tuesday.

"As we move forward, the United States will hold both sides accountable for any statements or actions that inflame tensions or prejudice the outcome of talks as this decision did," he told journalists in Ramallah, the political capital of the occupied West Bank.

"It is incumbent on all parties to grow an atmosphere of support for the negotiations and not to complicate them."

Abbas said Israel's announcement, and an earlier decision to build 112 new homes for settlers in the West Bank "undermine trust and deal a severe blow to efforts deployed over the past months to start indirect negotiations."

The Palestinians see east Jerusalem as the capital of their promised state. Israel considers the city its eternal and indivisible capital. It seized east Jerusalem in the 1967 war and later annexed it in a move the international community did not recognize.

Biden had hoped his meetings in Jerusalem and Ramallah would boost the indirect talks Israel and the Palestinians have agreed to convene after the Palestinians ruled out any direct negotiations without an Israeli freeze on settlement expansion.

"The United States considers the goal to be not only in the interests of the Palestinians and the Israelis but in the United States' interests as well. We also believe that the gaps between the Israelis and the Palestinians can only be resolved by negotiations. The indirect talks being launched should lead to direct negotiations," he said.

"Our administration is fully committed to the Palestinian people and to achieving a Palestinian state which is viable and contiguous," Biden said.

But his visit was overshadowed by the east Jerusalem settlement expansion plans, which drew widespread international criticism.

U.N. chief Ban Ki-moon stressed that "settlements are illegal under international law" while France called the decision "ill-timed."

Representatives of Arab states planned to discuss the issue later Wednesday with Arab League chief Amr Mussa, who harshly condemned the Israeli move. Related article: Arab states vow response

"The insult has reached a point that not a single Arab could accept," Mussa told reporters.

"Israel does not care about anybody, neither the mediator, nor the Palestinians."

Even the office of Israeli Defense Minister Ehud Barak issued a statement expressing "anger after the unwarranted announcement which affects peace negotiations with the Palestinians — negotiations of the highest interest for Israel."

Israeli media were near-unanimous in condemning the government's move, which the Haaretz newspaper called a "slap heard round the world."

Maariv pointed out that Biden had hoped to restore the chemistry between the White House and Israel. "And what happened? Within 15 minute,s we lost him, too."

Washington has pushed for months for both sides to resume talks, but direct negotiations have been on hold since Israel launched a devastating 22-day offensive in the Hamas-ruled Gaza Strip in December 2008.

On Wednesday evening, Biden visited a stone quarry in Bethlehem with Palestinian Prime Minister Salam Fayyad, and briefly visited a souvenir store selling icons, olive wood statuettes and other religious souvenirs.