The expansion of Gilo in Jerusalem is widening the divide between Israelis and Palestinians.The Jewish neighbourhood was built on land Israel captured in 1967. But recent plans to build 900 more homes have made it harder for Israel to make peace in the region, having embittered the Palestinians. The geography of Jerusalem remains one of the core issues in the Israeli-Palestinian conflict. Palestinians demand East Jerusalem as the capital of their future state. Israel continues to defend plans for expanding Gilo despite sharp criticism from other countries. The US is dismayed by the Israeli housing plan. Palestinians stood by and watched a house being demolished. Clashes with Israeli security forces soon followed. Nearly 200,000 Israelis live in the neighbourhoods around East Jerusalem. Palestinians consider the Jewish neighbourhoods there as settlements. They have refused to attend peace talks until Israel stops building on occupied territory.