City officials moved forward Tuesday with a plan to build 900 homes in a disputed neighborhood of Jerusalem, prompting sharp criticism from the White House, the Palestinians and others who feel it will further undermine the chance of renewing peace talks.

The new units will expand the Jewish neighborhood of Gilo, one of several built on land taken by Israel in the 1967 Arab-Israeli war and annexed to the city in a step not recognized by the international community.

The Obama administration has asked Israel to halt building in those parts of town, which the Palestinians say should form the capital of their future state.

White House spokesman Robert Gibbs said the administration was "dismayed" at the Jerusalem Planning Committee's approval of the Gilo project.

"At a time when we are working to relaunch negotiations, these actions make it more difficult for our efforts to succeed," Gibbs said. The status of Jerusalem, he said, is a matter that should be negotiated between the two sides, and "neither party should engage in efforts or take actions that could unilaterally preempt or appear to preempt negotiations."

The administration has vacillated in its stance on Israeli construction in areas claimed by the Palestinians, at first demanding a total freeze, then praising Israeli offers that fell well short of that. Tuesday's language seemed to mark a return to the tougher line, at least where Jerusalem is concerned. The administration criticized not just the Gilo project but also "other Israeli practices in Jerusalem related to housing, including the continued pattern of evictions and demolitions of Palestinian homes."

The Gilo issue was also raised in a meeting Monday in London between U.S. special envoy George J. Mitchell and Yitzhak Molcho, a representative of Israeli Prime Minister Binyamin Netanyahu. Palestinians have grown increasingly frustrated at the pace of talks with Israel and are considering a move to unilaterally declare a Palestinian state. Chief Palestinian negotiator Saeb Erekat said the city's decision "shows that it is meaningless to resume negotiations when this goes on."

The Palestinians have said they will not reopen talks with Israel until it stops all Jewish construction in the occupied West Bank and the disputed neighborhoods of Jerusalem. Continued Israeli building, they say, will make it more difficult to negotiate acceptable borders between Israel and a future Palestine.

Israel has refused to halt construction, particularly in the case of Jerusalem, which it regards as no longer a matter of dispute but as a part of sovereign Israeli territory.