(Adds quotes, background) BRUSSELS, Dec 7 (Reuters) - U.S. Secretary of State Condoleezza Rice warned Israel on Friday its plan to build 300 house units on land captured in the 1967 war threatened U.S.-backed efforts to reach peace with Palestinians. "We are in a time when the goal is to build maximum confidence with the parties and this doesn't help to build confidence," she said in rare U.S. criticism of Israel. "There should not be anything which might prejudge final-status negotations," Rice said after talks with Israeli Foreign Minister Tzipi Livni on the sidelines of a NATO meeting. "It's even more important now that we are on the eve of the beginning of the negotiations. I made that position clear," she told a news conference. Israel has issued a tender for the construction of some 300 units at Har Homa, one of several residential districts that have been built on land captured by Israel in the 1967 war and now home to a substantial Jewish community. The United States fears the move could scupper peace talks launched last week at a U.S.-hosted conference in Annapolis, Maryland. Peace negotiations are due to begin on Dec. 12. Palestinian leaders have said the home-building undermines that peace process launched by U.S. President George W. Bush and aimed at reviving talks that had been dormant for seven years. Under obligations contained in the 2003 "roadmap" framework for Middle East peace, Israel must cease settlement activity. But Israel has said it does not consider the site, known as Abu Ghneim by Palestinians, as part of the West Bank territory the Palestinians want for a state. (Reporting by Sue Pleming and Mark John; editing by David Brunnstrom)
