EU foreign policy chief Catherine Ashton on Friday said that she disapproved of the Interior Ministry's decision to approve 930 new apartments in east Jerusalem. Ashton said the new settlements damaged the prospects for peace, according to AFP.

"I am profoundly disappointed by Thursday's approval of a project that has triggered fierce criticism from the Palestinians and the international community," Ashton said.

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Earlier on Friday, Palestinian negotiator Saeb Erekat also slammed the decision and said "it makes clear Israel's intention to turn this occupation into effective annexation."

"This is a flagrant display of disrespect and disdain to the international community, which has repeatedly condemned Israeli settlement construction as an illegal obstacle to peace," Erekat said in a statement.

Two years after it was first deposited for approval, the Interior Ministry’s Jerusalem District Planning and Building Committee on Thursday gave its final approval for Har Homa C, which is to be located on a hill adjacent to the existing Har Homa neighborhood in the capital’s southeast.

In a nod to the tent-city housing protesters, Interior Minister Eli Yishai said that 20 percent of the new apartments will be small ones destined to be more affordable for young couples. He added that he had instructed his office to promote projects that had a mix of large and small apartments, to address the lack of affordable housing.

“We are continuing to build in Jerusalem and in all of Israel,” Yishai said in a statement.

“The lack of real estate is severe and we will not stop projects.”

The Har Homa C project has come up for discussion a number of times in the past year, including twice in the spring, though each time it was delayed for political reasons.

It was delayed when Prime Minister Binyamin Netanyahu visited London, and then again when President Shimon Peres met with President Barack Obama in Washington.

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