Jerusalem’s municipal committee  approved the construction of 400 housing units in an east Jerusalem neighbourhood, media reports said.

The 400 housing units are set to be built in the Jerusalem neighbourhood of Ramat Shlomo.

Israeli Prime Minister Benjamin Netanyahu and retiring Interior Minister Gideon Sa’ar both agreed to promote the construction in the neighbourhood in a meeting last week and advanced the topic on the municipal commission’s agenda, Xinhua reported citing the Walla! news website.

According to the Ha’aretz daily, the original plan included 640 housing units, but was reduced to avoid damages to natural reservoirs. The plan was condemned by the US and the European Union, the newspaper added.

A month ago, the same committee granted the final approval to the construction of a massive new neighbourhood settlement, Givat Hamatos, in east Jerusalem, which is set to include 2,612 housing units.

The decision came just as Netanyahu arrived in the US for a meeting with President Barack Obama. It heightened the already mounting tensions between the two countries.

During the 1967 Mideast War Israel annexed east Jerusalem where more than 300,000 Palestinians live. The Palestinians and the international community are vehemently against the construction of housing units there, especially in areas that would make it difficult to form a continuing territory between the West Bank and east Jerusalem within a future Palestinian state.

Israeli officials, on their part, say Jerusalem is Israel’s “undivided and eternal” capital and that Israel has the right to build there.