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Israel's government has given the final go-ahead for the construction of 1,100 new housing units in east Jerusalem.
The move is sure to heighten tensions, which are already high following a Palestinian move last week to seek U.N. membership.
Israel's Interior Ministry announced Tuesday that it had given the final approval for the new homes to be built in Gilo, a sprawling Israeli enclave in southeast Jerusalem. It said construction could begin after a mandatory 60-day period for public comment.
The Palestinians claim east Jerusalem, which Israel captured in the 1967 Mideast war, as their future capital. They oppose all Israeli construction in the city's eastern sector and have demanded a freeze on settlement construction in east Jerusalem and the adjacent West Bank.