Israel's settlement expansion

Little has been achieved since last month's conference in Annapolis

Mahmoud Abbas, the Palestinian president, has said that the issue of Israeli settlement building remains at the top of his agenda in all negotiation meetings with Israelis.

Talks have been restarted on final status issues after the Annapolis conference in the US last month but very little has been achieved.

Imposing the status quo does not leave much for the Palestinians who aspire to have East Jerusalem as their future capital.

On Sunday, the Israeli government drafted a proposal to allocate $25 million next year to expand Jewish settlements.

We explore the real reason for settlement expansion while immigration to Israel reaches its lowest level in two decades, and birth rates decline, and ask what can the US do as an honest broker to push the peace process forward.

Watch part one of this episode of Inside Story on YouTube.