A second round of peace talks between the Israeli and Palestinian negotiation teams concluded on Monday without yielding results or progress, local media reported.

The two-hour meeting held in Jerusalem ended in disagreement with the Palestinians calling Israeli settlement building illegal, a top Palestinian negotiator said.

Palestinians insisted that Israel stop settlement expansion, while Israelis demand that the Palestinians implement reforms in security mechanisms.

"This is illegal because the 'road map' (peace plan) stipulates that you should stop all settlement activity, including natural growth," the Palestinian top negotiator Saeb Erekat was quoted by Ha'aretz as saying after the session.

The Israeli and Palestinian negotiation teams met for the second time since the international peace conference held last month in Annapolis, Maryland.

Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas are scheduled to meet later in the week for the first time since the Annapolis peace conference. The two leaders will try to resolve the main problematic issues obstructing the talks at this point.

Israel has expanded plans to build new homes in a disputed East Jerusalem neighborhood as well as in a nearby settlement, according to the Housing Ministry's proposed budget for 2008.

Earlier this month, Israel angered the Palestinians and drew criticism from the United States when it announced plans to build 307 new apartments in the East Jerusalem neighborhood of Har Homa.

(Xinhua News Agency December 25, 2007)