Israel was planning to advance four building projects in east Jerusalem as "compensation" for the overnight release of 26 Palestinian prisoners, Israeli media cited Prime Minister Binyamin Netanyahu as saying.
Netanyahu made the announcement, as was expected alongside the much-contested freeing of 21 long-serving Palestinian prisoners to the West Bank, and five to Gaza.
Shortly after the second of four prisoner releases to the Palestinian Authority was completed in the early hours of Wednesday morning, Netanyahu said the government planned to approve tenders for the construction of 1,500 additional housing units in the east Jerusalem neighborhood of Ramat Shlomo.
In addition, he said current owners of apartments in Ramat Shlomo would be allowed to expand their homes with another room to the size of 50 square-meters.
During talks with Interior Minister Gideon Sa'ar, approval was also received for the establishment of a visitor's center near the City of David National Park in Silwan.
The premier said plans would also be advanced for the previously-halted construction of a national park on the slopes of Mount Scopus, which would allegedly block the expansion of Arab neighborhoods in the area.
In July, the cabinet approved the release of 104 Palestinian prisoners in Israeli jails in four stages. Israel released 26 of those prisoners in August.
Israel’s agreement to release the prisoners was a key factor in the PA’s decision to begin direct negotiations with Israel.
Prior to July, it had refused to hold direct talks with Israel until it halted West Bank settlement activity and Jewish building in east Jerusalem.