The Israeli Peace Now movement said that the Housing Minister Ariel Atias told Giv’at Ze’ev Mayor Amos Tartman that his ministry started to plan a new neighborhood consisting of 600 new housing units between Giv’at Ze’ev and Jerusalem.

Atias said in his letter that the plan received his ministry’s funding. According to Peace Now, the plan requires the approval of Israeli Defense Minister Ehud Barak.

Peace Now said that the new settlement neighborhood will connect Giv’at Ze’ev with East Jerusalem, an area Palestinians want the capital of their future independent state.

The development came days after the Israeli Army Radio said that some 800 housing units will be built in Giv’at Ze’ev. The report said that the plan has already received Housing Ministry’s funding and also requires the approval of Barak.

Givat Ze'ev, northwest of Jerusalem, is one of the larger settlements in the Palestinian territories with a population of around 10,000 Jewish occupier. Israel captured East Jerusalem in the June 1967 War, annexed it, and has since built settlements there that are home to more than 200,000 Israelis.

Sa’eb Erekat, member of Palestine Liberation Organization (PLO)’s Executive Committee, said that “the continuation of settlement construction in East Jerusalem destroys all chances left for the peace process.”