German Chancellor Angela Merkel called Israeli Prime Minister Benjamin Netanyahu on Friday and expressed anger over the approval of 1,100 housing units in Gilo neighborhood in over the Green Line in Jerusalem.

The Chancellor's office said Merkel told Netanyahu that the new housing permits "raise doubts over the Israeli government's readiness to begin serious negotiation with the Palestinians."

Over the past two weeks Merkel, along with U.S. President Barack Obama, worked to issue a new Quarter declaration calling on the sides to return to the negotiating table as soon as possible. "The Quartet's announcement made it clear that the sides must avoid taking provocative steps," Merkel told Netanyahu. "I cannot understand how only a few days after the Quartet's announcement there is news of the approval of 1,100 new housing units." Merkel added that "the government of Israel must now clear the doubts over its seriousness. It is your responsibility."

Netanyahu's office said in response that the prime minister does not view Gilo as a settlement, but as neighborhood in Israel's capital in which every Israeli government has built homes.

On Tuesday, Palestinian President Mahmoud Abbas spoke with Merkel and said he understood that the Quartet was calling for negotiations based on the 1967 borders and opposed unilateral moves, meaning construction in the settlements should stop.