SIRTE, Libya — Libya's maverick leader Moamer Gadhafi hosts his first Arab summit this weekend that aims to "rescue" Jerusalem as Israel defies international calls for a construction freeze in the Holy City.

The Saturday-Sunday summit in Sirte is also expected to home in on Sudan where President Omar al-Bashir, although faced with an international arrest warrant for alleged war crimes in Darfur, is seeking re-election.

The Israeli-Palestinian peace process has already dominated the runup to the summit amid calls for both the Arab world's pro-Western and radical leaders to set aside feuding and unite against Israel.

Gadhafi, who himself has been known to storm out of Arab summits in the past and has a history of ruffling the feathers of fellow Arab leaders at such forums, has set the tone.

His Mediterranean hometown of Sirte in central Libya is decked with banners that proclaim: "The time is not for disputes," "We must work together," and "The interest of the (Arab) nation rises above all differences."

Syria has also set the lofty target of Arab unity and circulated a proposal on how to "resolve Arab differences," according to delegates.

Syrian President Bashar al-Assad, whose country like Libya is emerging from international isolation, called on Wednesday for the Arab world to close ranks and "rescue Jerusalem from Israeli schemes."

Israel has infuriated the Arab and international community with plans to expand Jewish housing in mainly Arab east Jerusalem.

Its U.S. ally has warned that the plans would derail its efforts to revive Israel's peace talks with the Palestinians amid a rise of violence in and around Jerusalem over the past two weeks.

The 22-member Arab League's secretary general, Amr Mussa, has even suggested that all peace talks with the Jewish state, direct or indirectly through U.S. mediation, be suspended.

"Negotiations with Israel at this time are pointless," he said ahead of the Sirte summit.

His deputy, Ahmed Ben Helli, said on Tuesday that Arab foreign ministers meeting before the heads of state would draft a summit resolution outlining measures "to rescue Jerusalem from being Judaised."

The draft will be discussed at a preparatory meeting in Sirte on Thursday and be submitted to the summit for approval.

Arab diplomats said the aim was to set up a commission to record Israeli "violations" in east Jerusalem for referral to the International Court of Justice in The Hague.

Israel has refused to go back on its announcement to build 1,600 new homes in east Jerusalem.

U.S. Secretary of State Hillary Clinton described the timing of the announcement — during a visit to Israel by Vice President Joe Biden on March 9 aimed at promoting indirect peace negotiations — as "insulting."

But after White House talks on Tuesday, Israel's hawkish Prime Minister Benjamin Netanyahu remained defiant.

"If the Americans support the unreasonable demands made by the Palestinians regarding a freeze on construction in east Jerusalem and the West Bank, the peace process risks being blocked for a year," he said.

Further riling the Palestinians, Israeli media reported that municipal authorities had approved a plan to build a further 20 homes for Jews in east Jerusalem.

The Quartet of major players in the Middle East peace process — the United States, European Union, Russia and the United Nations — on March 19 called on Israel to "freeze all settlement activity, including natural growth."

The Palestinians are under mounting U.S. pressure to enter indirect peace talks as soon as possible, but regional powerhouse Saudi Arabia said on Wednesday that it was unrealistic given Israel's "stubborn" stand.

Meanwhile, it remains unclear how many Arab leaders will turn up in Sirte.

Saudi King Abdullah who has traded insults with Gadhafi at past summits could stay at home, while Egyptian President Hosni Mubarak, recovering in hospital from surgery, is sending Prime Minister Ahmed Nazif.

Lebanon which blames Libya for the disappearance in 1978 of leading Shiite cleric Mussa Sadr is still mulling the invitation.

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