Originally posted by the Voice of America. Voice of America content is produced by the Voice of America, a United States federal government-sponsored entity, and is in the public domain. East Jerusalem Hotel Demolished for New Israeli Housing VOA News 09 January 2011 A worker walks past excavators during the demolition of the Shepherd Hotel in the Sheikh Jarrah neighbourhood of East Jerusalem, 09 Jan 2011. Photo: Reuters A worker walks past excavators during the demolition of the Shepherd Hotel in the Sheikh Jarrah neighbourhood of East Jerusalem, 09 Jan 2011. The demolition of an East Jerusalem hotel got under way Sunday to make way for new Israeli housing. The 20-apartment project has angered Palestinian leaders, who said direct peace talks with Israel will continue only on the condition construction is halted in East Jerusalem as part of a freeze on Jewish settlements. The United States has also sought assurances from Israel it would restrict settlement construction in the region. The Palestinians want East Jerusalem as the capital of a future state, while Israel considers all of Jerusalem its "eternal and indivisible" capital. Israel annexed East Jerusalem after capturing it in the 1967 Six-Day War in a move never recognized internationally. .