Ammon News - JERUSALEM (AFP) - Israel is poised to approve incentives for buyers of nearly 1,000 new homes in annexed east Jerusalem despite a major U.S. push to revive peace talks, reports said on Sunday.

The plan, which will offer prospective buyers a huge discount on 930 new homes that are about to be built in Har Homa, will be discussed by Jerusalem municipality's finance committee on Monday, army radio and the Maariv newspaper reported.

The reports emerged as U.S. Secretary of State John Kerry was wrapping up an intensive four days of shuttle diplomacy toing and froing between Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmud Abbas in a bid to coax them back to direct negotiations.

If approved, it will lower the price of each new home by 100,000 shekels ($27,500 or 21,000 euros), in a move which will be funded by the housing ministry, which is currently run by Uri Ariel, a hardline settler from the far-right Jewish Home party.

Har Homa is located on east Jerusalem’s southern outskirts and construction there is likely to be a serious impact on the sector’s boundary with the rest of the West Bank, analysts say.

Last week, the municipal planning committee granted final approval for another 69 new homes in another area of Har Homa on the eve of Kerry’s arrival.

The plan to build more than 900 homes in Har Homa was approved in 2011, with tenders issued and construction companies waiting in the wings to start work but it has been on hold due to its sensitivity, Maariv said.

Monday’s discussion by the finance committee will examine a housing ministry proposal to shoulder the cost of developing public infrastructure such as roads, pavements and drainage in the neighborhood - thereby taking on an expense which is usually shared among homebuyers, the paper said.

Buyers would then enjoy a 95 percent discount in a move which would cost the ministry 100 million shekels.

Jerusalem councillor Elisha Peleg, who belongs to Netanyahu’s rightwing Likud party, made no effort to hide his delight.

“The temporary suspension of construction in east Jerusalem is over, despite the visit of Secretary of State Kerry,” he told army radio.

“There is no reason to halt construction anymore, because it is now proved that stopping construction in east Jerusalem has not brought about a renewal of negotiations with the Palestinians but has caused a severe shortage of housing,” he said.

Earlier this month, the housing minister implied that there had been a de facto freeze on new housing projects in the West Bank including east Jerusalem since the start of the year.

Israel seized east Jerusalem during the 1967 Six Day War and later annexed it in a move never accepted by the international community. The Palestinians want to make the sector the capital of their future state.