I think it is almost impossible for Israel to build trust given its past behavior but perhaps building could be considered a little differently. East Jerusalem is predominantly arab and so likely to become the capital of the palestinian state. Israeli building gluttony should be confined to West Jerusalem in predominantly Jewish neighborhoods. As for the proposed 1600 units recently announced, I don't enough about where they are to be, but past Israeli behavior would lead me to suspect they are on land rationally destined for Palestine.
Egyptian court sentences Al-Jazeera journalists to 3 years in prison (Reuters)
from the article: Israel to engage in 'trust-building' moves in wake of East Jerusalem row