Israel's Interior Ministry has given final approval for the construction of 1,600 new homes in East Jerusalem, days after the United States said it was “deeply concerned” about Israel continuing to build in the city.

A spokesman said Thursday the ministry also expects to soon approve the construction of another 2,700 houses in East Jerusalem.

Palestinians want East Jerusalem as the capital of a future state. They have opposed any Israeli construction and refused to resume peace talks unless Israel stops building in the city and in the West Bank.

Palestinian negotiator Saeb Erakat strongly condemned the planned construction, and called on the United States to reconsider its opposition to a Palestinian bid for statehood at the United Nations.

Israel and the U.S. have opposed the bid, saying negotiations are the only way to resolve borders and other core issues of the conflict.

The Israeli Interior Ministry spokesman said the housing plans are not politically based, but rather a reaction to recent protests about the high cost of living and calls for more affordable housing in Israel.

After Israel announced a separate plan last week to build 900 homes in East Jerusalem, the U.S. State Department said Tuesday the construction works against efforts to restart negotiations.

Palestinian President Mahmoud Abbas is lobbying U.N. members to grand statehood based on the entire West Bank, the Gaza Strip and East Jerusalem, areas that Israel captured in the 1967 Mideast war. Israel withdrew from Gaza in 2005.