Construction began this week on a housing project at the Shepherd Hotel compound in the capital’s Sheikh Jarrah neighborhood, about 3 kilometers away from 22 illegally built Arab homes whose demolition was approved by the municipality last week.The Shepherd Hotel project is not a municipal initiative and is instead being advanced by US businessman Irving Moskowitz. The plan to convert the building, which was once used as a villa by Grand Mufti of Jerusalem Amin al- Husseini, into 20 housing units for Jews – has in the past drawn criticism from the US, which has made clear its opposition to Jewish construction in the eastern neighborhoods of the capital.RELATED:Why Netanyahu let Barkat move ahead with Silwan planSilwan violence reaches new heightsSilwan criticism continues to swellUN chief slams Silwan planAt the Shepherd Hotel on Monday, a vehicle was performing geo-technical engineering tests in the parking lot of the fenced-off compound, where it was drilling large rods into the ground.“This is the second day we’ve been out here,” one of the workers told The Jerusalem Post.“This is the first step. We’re performing different tests on the soil,” he said. “No other work has begun inside the compound itself.” Peace Now, which released a statement on Sunday regarding the plan, said that “the mayor of Jerusalem and his right-wing partners are continuing to determine facts on the ground and harm Israel’s political status.”“[Prime Minister Binyamin] Netanyahu must order [Jerusalem Mayor Nir] Barkat to stop the construction in Sheikh Jarrah immediately,” the statement said.Barkat spokesman says investors decide when construction beginsStephan Miller, a spokesman for Barkat, told the Post that the Shepherd Hotel investors had received final approval for the plan in March, and after paying the municipality for the building permits, it was up to the investors as to when and where they would start construction.“There’s nothing new here,” Miller said. “The investors presented their plan [to the municipality] in July 2009, they received final approval in March of this year, and after paying the final fee to municipality, any private resident, citizen or contractor can begin to build whenever they want.“Once any construction project in the city of Jerusalem has completed the permit process and paid all relevant fees to the municipality, it can begin construction, irrelevant of race, religion, creed and gender,” he added.The Shepherd Hotel was built in the 1930s for Husseini, who is known for his collaboration with the Nazi regime. Husseini, who was wanted by the British authorities for inciting violence, fled Mandatory Palestine in 1937, and the Shepherd Hotel was confiscated by the British.After 1948, the area and properties on it came under control of Jordan, and Israel took control of the property following the Six Day War. In 1985, Moskowitz bought the property and it continued to operate as a hotel, renamed the Shefer Hotel. The Border Police used it as base for several years.In 2007, Moskowitz initiated plans to build 122 apartments on the site.In 2009, the plan was modified.Permission to build 20 apartments near the hotel was given, and formal approval was announced by the Jerusalem municipality on March 23, 2010.