The Interior Ministry on Tuesday gave tentative approval for the construction of a new hotel in east Jerusalem, in the latest Israeli building plan in the eastern part of the city. The proposed hotel would be built just outside the Old City walls near the Rockerfeller Museum in a predominantly Arab section of the city. The construction of the hotel on city-owned land, which has been 12 years in the planning, would see the demolition and rebuilding of 14 derelict Arab-owned stores in a wholesale market as well as a local kindergarten, officials said. The building proposal, which was originally put forward by the municipality, will improve the economy of city residents in general and east Jerusalem residents in particular, Jerusalem municipality spokesman Gidi Schmerlng said in a written response. The planned new east Jerusalem commercial center would include the new stores, two kindergartens and a welfare office, said Dalit Zilber, district planner for the Interior Ministry. "This proposal is part of our policy to encourage tourism in the city," Zilber said. A record three million tourists visited Israel last year. Two new hotels are currently under construction elsewhere in the city. The 200-room hotel, which overlooks the Kidron Valley, would include a public rooftop on street level which is planned to serve as a city observation post. Opponents of the planned hotel have 60 days to register their opposition to the proposal. Israel differentiates between building in east Jerusalem and the West Bank. The US and the international community do not make such a distinction, and are opposed to any Israeli construction in either area. Palestinians demand all of east Jerusalem as the capital of their future state.