Palestinians and Jews working for peace and justice have expressed deep foreboding about the future after Israel responded to the appalling recent shootings in Jerusalem with hints of reprisals and a pledge to occupy more territory.

Leaders of churches throughout the world, including the National Council of Churches USA (NCCUSA), have expressed shock and sorrow over the 6 March shootings at the Mercaz Harav Yeshiva in Jerusalem.

A Palestinian gunman, a resident of East Jerusalem, entered the rabbinical school and began shooting, killing eight people and wounding at least nine before the gunman was fatally wounded by an off-duty Israeli Defense Forces officer.

Israel has said that those who carry out such actions must “pay the price”, but after 12 Israelis and 120 Palestinians have died following recent military action in Gaza, critics say that the cycle of recenge must end, and that the lives of all must be given equal regard.

Now Israeli Prime Minister Ehud Olmert has approved a plan to build up to 750 new homes in a Jewish settlement in the illegally occupied West Bank territories.

The project was first signed off in 1999, but stopped two years later after Palestinian labourers refused to go on.

Israel’s housing minister has said the construction at Givat Zeev would address “the demographic needs of Jerusalem”. But the decision provoked an angry reaction from Palestinian leaders.

For the Palestinians there are few issues as contentious as the building of Jewish settlements in the West Bank, says the BBC’s Crispin Thorold in Jerusalem.

On 7 March five leading US religious leaders drafted a statement deploring the Jerusalem bombing. Along with Evangelical Lutheran presiding bishop Mark S Hanson, others who signed were the Rev Michael Kinnamon, NCCUSA general secretary, New York; the Rev John H Thomas, general minister and president, United Church of Christ, Cleveland; the Rev Clifton Kirkpatrick, stated clerk of the General Assembly, Presbyterian Church (USA), Louisville, Ky.; and Bishop C Christopher Epting, deputy for ecumenical and interfaith relations, the Episcopal Church, New York.

“We pray for all of those who have died, and for their families and loved ones,” the religious leaders said in the statement. The leaders said they pray for the other students at the seminary, “who will carry the scars of this horror for the rest of their lives.”

“This killing compounds our sadness over the recent violence in Gaza and Israel. Acts of terror and reprisal are abhorrent,” the leaders wrote. “We are thankful that it appears these events will not derail the peace process. We pray that such tragic deaths not be allowed to inflame more violence, but rather be a spur to redouble efforts to reach an Israeli-Palestinian ceasefire, and to all the more vigorously pursue peace.”

The US religious leaders have called on political and religious leaders for Israelis and Palestinians to rededicate themselves to working for peace, and to provide leadership that is “so desperately needed for peacemaking to continue.”

They also called on US President George W. Bush and other US leaders to support both the Israeli and Palestinian leadership, and to continue efforts for a “secure, just and viable solution” to the Israeli-Palestinian conflict.

Other Christian leaders have made similar appeals.