Prime Minister Benjamin Netanyahu announced on Tuesday he was reviving a contentious plan to build homes in the area that lies between Jerusalem and Maaleh Adumim, essentially expanding the capital's metropolitan area.
Netanyahu's announcement would give the go-ahead to 3,500 homes on a parcel of barren hills known as E-1.
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Israel had frozen a plan to build settlements there since 2012 because of objections from the United States, European allies and other world powers who considered the project a threat to any future peace deal with the Palestinians.
Palestinians say it would cut off its residents from access to east Jerusalem.
"I have given instructions to immediately publish for deposit the plan to build 3,500 housing units in E-1," Netanyahu said in a speech, describing the first phase of a planning process. "This had been delayed for six or seven years."
The E-1 plan would expand the large Jewish community of Maaleh Adumim, effectively connecting it to Jerusalem, about a 15-minute drive away.
Nabil Abu Rdainah, a spokesman Palestinian President Mahmoud Abbas, said Netanyahu's announcement "crossed all red lines" and he called on the international community to act.
In 2005, Netanyahu toured the area to kick off a bid for the leadership of the rightwing Likud party. He told reporters who accompanied him that if he became prime minister, he would defy international pressure and build on the site to create a "Greater Jerusalem" under Israeli control.
