1 August 2011
Last updated at 06:30 ET
Har Homa settlement 2010 Talks between the two sides are stalled over continued building of settlements in the West Bank
Final approval has been given for the building of 1,600 settler homes in occupied East Jerusalem by the Israeli interior ministry.
The ministry is expected to approve the building of a further 2,700 homes, an official has said.
This comes weeks ahead of expected moves by the Palestinian Authority to have a Palestinian state recognised at the United Nations.
The campaign for recognition is strongly opposed by Israel.
Direct talks between the two sides are stalled, and there are no known current initiatives to get them re-started.
The Israeli announcement has been criticised by Palestinian officials.
"We strongly condemn the new Israeli decision," Palestinian negotiator Saeb Erekat told the AFP news agency.
"[I urge the US] to reconsider their position rejecting the Palestinian move to go to the UN for recognition of a Palestinian state… We call on [US President Barack Obama] to support this approach because it is the only way to preserve the two-state solution."
'Economics not politics'
A spokesman for the interior ministry, Roei Lachmanovich, told AFP minister Eli Yishai had given approval for "1,600 homes in Ramat Shlomo and will approve 2,000 more in Givat Hamatos and 700 in Pisgat Zeev".
The approval of 1,600 homes in Ramat Shlomo caused a diplomatic row between the US and Israel. The initial go-ahead for the homes was initially given in March 2010 as US Vice-President Joe Biden was on a visit to Israel pressing for the resumption of Palestinian-Israeli peace talks.
Mr Lachmanovich insisted that that the approval for the settlement homes was "economic" not political.
Israel is currently experiencing nationwide protests over the high cost of living. One of the central issues is the lack of affordable housing.
"These are being approved because of the economic crisis here in Israel, they are looking for a place to build in Jerusalem, and these will help," he said. "This is nothing political, it's just economic."
Last week, the interior ministry issued a final green-light for the construction of 900 new homes in the East Jerusalem settlement of Har Homa, which lies in the south-west of the city, beside Bethlehem.
Direct talks between the Palestinians and Israelis are currently stalled over the Palestinian refusal to take part while the Israeli government continues to build settlements in the West Bank.
The settlements are considered illegal under international law, though Israel disputes this. Israel has occupied the West Bank since 1967, and annexed East Jerusalem, a move not recognised by the international community.
More than 500,000 Jewish settlers live in the West Bank, including East Jerusalem, among a Palestinian population of about 2.5 million.
"Economics, not politics" my eye. Talk about cynical usage of Israel's people by their right-wing government trying to fool both its citizens and the world, this one should take some prize.
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