Israeli security forces have arrested a group of peace activists protesting about work starting on a new Jewish settlement in a mainly-Palestinian part of East Jerusalem.

The demonstrators, from the Peace Now group, chained themselves to bulldozers as contractors moved in to clear the ground for the development.

The BBC Jerusalem correspondent says the Prime Minister, Binyamin Netanyahu, gave the go-ahead to start work on the scheme to appease Israeli right-wingers who had been infuriated by the peace accord signed with the Palestinians in Washington.

The senior Palestinian official in Jerusalem, Feisel Hussseini, has criticised Mr Netanyahu's decision, calling it the first violation of the recent agreement.

The BBC correspondent says the Palestinians want East Jerusalem to be the capital of a future Palestinian state.