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Israel’s prime minister and the Palestinian Authority president will meet Thursday to diffuse a crisis situation.

Ehud Barak and Mahmoud Abbas will try to come to an understanding on Israel’s tenders for building housing in Har Homa, a neighborhood in east Jerusalem on the Palestinian side of the pre-1967 border, as well as for apartment buildings in Maale Adumim, one of the settlement blocs that Israel intends to keep in a final peace settlement.

The crisis over construction in settlements has stalled peace negotiations since they were launched last month at an American-hosted summit in Annapolis, Md.

The Israeli government considers Har Homa a part of Jerusalem. Olmert claims he did not know in advance about the housing units.

Israel also accuses the Palestinians of not following through on their commitments to stop terrorism under the “road map” framework.

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