JERUSALEM – A Palestinian rocket barrage, an Israeli army incursion in Gaza and a fresh land dispute in Jerusalem marred the first Israeli-Palestinian peace talks in seven years Wednesday.

Instead of building on the momentum of last month’s high-profile peace conference in the U.S., the two sides traded barbs and accusations – and wrapped up a 90-minute session without any achievements.

An Israeli official described the atmosphere as “tense,” and a Palestinian official reported “not an inch” of progress.

It was the first formal negotiating session since Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas relaunched peace talks at last month’s Mideast conference in Annapolis, Md. The last round of talks broke down in January 2001, three months after Palestinian-Israeli violence erupted.

At the heart of Wednesday’s tension was an Israeli announcement last week that it would build 307 new homes in the Har Homa neighborhood of Jerusalem, in an area the Palestinians claim as their future capital. Palestinian negotiator Saeb Erekat said his delegation expressed “outrage.”

“We are coming to negotiate over Jerusalem and borders, and the dictation and facts on the ground continue,” he said. “If you want to restore the credibility of the peace process, the Israeli government must revoke this order.”

Also tarnishing the talks was fresh violence between Israel and militants in Gaza, where the Islamic Hamas seized power six months ago. On Wednesday, Palestinian militants fired more than 20 homemade rockets into Israel, causing damage to structures and slightly wounding one woman. The barrage came hours after Israeli forces ended an incursion into the coastal strip that killed six militants and left a wide swath of damage.