Jerusalem officials on Monday gave preliminary approval for the building of 942 new apartments in a Jewish development in the city's contested eastern sector, threatening to create new friction ahead of the Israeli president's White House visit.
Although it would take years before construction starts, the project in the neighborhood of Gilo will likely infuriate the Palestinians at an especially delicate diplomatic moment. Israeli President Shimon Peres is scheduled to meet Tuesday with President Barack Obama to explore ways to jump-start stalled Israeli-Palestinian peacemaking.
Palestinians have refused to negotiate as long as Israel builds housing for Jews in east Jerusalem and the West Bank, occupied territory that the Palestinians claim for their future state.
Israel says the Palestinians should not impose conditions for talks, and stresses that construction has continued in those areas during previous rounds of negotiations.
Obama, the Palestinians and the rest of the international community consider Israeli construction in the West Bank and east Jerusalem to be illegal settlements.
Israel says the status of east Jerusalem is different because it has annexed the area, made it part of its capital and offered its Palestinian residents citizenship. But the annexation has never been internationally recognized.
A U.S. Embassy spokesman was not available for comment on the proposed Gilo construction.
Just over a year ago, another building project in east Jerusalem _ announced during a visit to Israel by Vice President Joe Biden _ caused a major diplomatic rift with Washington that took months to mend.
Palestinian officials weren't immediately available for comment.
The Jerusalem municipality said the approval process for the Gilo project went ahead Monday in accordance with the law, "irrespective of religion, race or gender."
Jerusalem Municipality spokesman Elie Isaacson said the process would "take years to be approved completely" and that it could still be appealed. He said Monday's approval was "only the second phase out of six bureaucratic stages."
The plan would be subject to public comment and later would require Interior Ministry approval. Actual construction would require a whole new set of approvals at the local level.
The fate of east Jerusalem, homes to sites sacred to Judaism, Islam and Christianity, is the most explosive issue dividing Palestinians and Israelis.
Israel has ringed east Jerusalem with Jewish neighborhoods since capturing the territory from Jordan, along with the West Bank, in the 1967 Mideast war. Some 200,000 Jews now live there alongside 250,000 Palestinians.
Prime Minister Benjamin Netanyahu has said he would not share Jerusalem with the Palestinians as part of a final peace deal.
Palestinians have privately acknowledged that Israel would hold on to the Jewish neighborhoods in east Jerusalem under a peace accord. But they want construction there to halt in the meantime because they see it as undermining their own claims to the city's eastern sector.
Also Monday, officials said Defense Minister Ehud Barak has approved master plans for four long-established and authorized settlements. The move retroactively recognizes illegal construction inside those settlements and allows for more dense building. Any new construction, however, would require the approval of political leaders, said Defense Ministry official Eitan Broshi.
The biggest of the settlements has more than 100 families. The other three have 30 to 60, Broshi said.