US Vice President Joe Biden on Thursday ramped up his criticism of Israel over its approval of 1,600 new apartments in a long-established Jewish neighborhood in Jerusalem.

The new housing project was "obviously designed by some in Israel to undermine a peace process (Mideast envoy) George Mitchell finally got back on track," Biden told ABC News.

Biden again blasted as "provocative" the fact that the new development in the northeastern Jerusalem neighborhood of Ramat Shlomo was officially approved while he was visiting the Israeli capital.

Biden said that the Israeli-US relationship remains strong despite this incident, but indicated that Washington expects Israel to take steps to regain the American administration's trust.

US Secretary of State Hillary Clinton has suggested that Israel cancel the Ramat Shlomo project as a gesture of goodwill to both Washington and the Palestinians.