Israel has plans to build another 600 homes in occupied land it considers part of East Jerusalem, the Haaretz daily newspaper reported on Friday.
The plan approved by a district planning commission could further stymie U.S.-brokered efforts to renew stalled peace talks as Palestinian President Mahmoud Abbas who has insisted on a total settlement freeze including in Jerusalem.
Israeli spokesmen for the Jerusalem municipality and the Interior Ministry that oversees the planning commission were not immediately available for comment.
A similar building plan proposed late last year for elsewhere in the Jerusalem area drew international condemnation.
Israel has also been criticised for court-approved evictions of Palestinians from homes in East Jerusalem and threatened demolitions of other houses it says were built illegally.
The newspaper said more homes were intended to be built near the Pisgat Zeev neighbourhood and the Palestinian area of Shuafat, but that the original plan had been scaled back to 600 from an original 1,100 when it was learned some of the land was owned privately by Palestinians.
More than 200,000 Israelis already live in East Jerusalem and nearby areas of the West Bank that Israel captured in a 1967 war and considers part of the biblical city it sees as its eternal and indivisible capital.
Palestinians want East Jerusalem as capital of a future state in the West Bank and Gaza Strip.
Israeli Prime Minister Benjamin Netanyahu excluded Jerusalem from a 10-month moratorium in settlement building he ordered in November.
The World Court has ruled that all the settlements Israel has built in occupied territory are illegal.
(Writing by Allyn Fisher-Ilan; Editing by Alison Williams)
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