Israel has approved a construction plan to build 1,500 housing units in annexed East Jerusalem, prompting the Palestinians to warn they would seek a UN Security Council meeting on the issue.
Efrat Orbach, Israel’s interior ministry spokeswoman, said on Monday that the ministry's planning committee had given developers the go-ahead but told applicants to trim their request to build 1,600 new housing units at Ramat Shlomo to 1,500 and resubmit it "for final approval".
The plan caused a diplomatic rift with Washington when it was first announced in 2010 as US Vice President Joe Biden met top Israeli officials in Jerusalem to boost Israeli-Palestinian peace talks.
It has lain dormant since August 2011 but two weeks ago the ministry announced that it had been revived.
The Palestinian leadership said on Monday it would seek a UN Security Council meeting over the issue.
The leadership is about to take "important and necessary measures against Israel's settlement building, including recourse to the UN Security Council, to prevent implementation of these decisions," Nabil Abu Rudeina, President Mahmoud Abbas's spokesman, told AFP news agency.
Ramat Shlomo is a Jewish settlement in the mainly Arab eastern sector of Jerusalem which Israel seized in 1967 and later annexed in a move not recognised by the international community.
Monday's announcement will only add to an international outcry caused by a separate Israeli decision to plan 3,000 more settler homes in the occupied West Bank and East Jerusalem after the Palestinians won upgraded status at the United Nations last month.
Some of that construction is to take place in a controversial corridor of land east of Jerusalem called E1, which critics say could effectively cut off the northern West Bank from the south, and ultimately threaten the territorial contiguity and viability of a future Palestinian state.