JERUSALEM -- Israel said yesterday it was pushing forward with plans to build hundreds of homes in a Jewish settlement of east Jerusalem, risking renewed tensions with the Palestinians and its Western allies over the contentious project.

The announcement was part of a new Israeli settlement push announced earlier this month as retaliation for the Palestinians' success in winning UN recognition for a state. Israel was widely criticized internationally for the settlement plans, though actual construction would be far in the future.

An Interior Ministry committee approved an intermediate stage of planning Monday for the construction of 1,500 apartments in the Ramat Shlomo neighborhood, a part of the city Palestinians claim for a future capital.

The plan had been in the pipeline since it was first announced in 2010 during a visit to Israel by Vice President Joe Biden. It also caused a major diplomatic rift with Washington that took months to ease.

Ministry spokeswoman Efrat Orbach said the project still requires several more planning stages, and it could be years before final approval and construction.

Nabil Abu Rdeneh, a spokesman for Palestinian President Mahmoud Abbas, condemned the move, calling it a "stark challenge to the entire international community." There was no immediate American reaction.

Israel strongly objected to the Palestinians' UN bid, saying it was an attempt to bypass negotiations. Israel rejects a return to its 1967 lines.

Israel annexed east Jerusalem after the 1967 war and claims the area, home to sensitive Jewish, Christian and Muslim holy sites, to be an inseparable part of its capital. The Palestinians also claim east Jerusalem as the capital of their hoped-for state. About 200,000 Jews and roughly 250,000 Palestinians live in east Jerusalem.

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