Dozens of Palestinians erected protest tents in the E1 region between Ma'ale Adumim and Jerusalem in the West Bank on Wednesday, Israel Radio reported.
The protesters flew a large Palestinian flag and hung a photo of US President Barack Obama on one of the tents. Around 150 Palestinians came to the site and put up a number of smaller tents.
The Palestinian Authority has said that E1 land is needed so the future Palestinian state will be viable and have territorial continuity. It warned that Israeli construction there imperils the two-state solution.
On the other hand, Prime Minister Binyamin Netanyahu said in January that the area must be linked to Jerusalem saying, "We will not allow anyone to harm the contiguity between Jerusalem and Ma'ale Adumim."
Netanyahu made the January remarks to his cabinet after the IDF evacuated Palestinian activists from the region.