Initial plans exist to link the West Bank settlement of Adam with an expansion project of 400 units in east Jerusalem's Neveh Ya'akov neighborhood, according to Peace Now. The 400-unit east Jerusalem project drew headlines on Monday - even though it still needed the approval of a regional planning committee - because members of the international community and the Palestinians objected to Israeli construction in the Jewish sections of east Jerusalem. The Neveh Ya'akov project is likely, however, to gain approval in the coming months, as the Prime Minister's Office has not objected to the plan. Palestinians have said that Israeli construction in east Jerusalem - which is located over the Green Line - and in the settlements harms their ability to create a contiguous state in the West Bank with east Jerusalem as its capital. On Monday, the European Union reacted immediately to news of the possible expansion of a Jewish east Jerusalem neighborhood. "We deplore" Israel's announcement of the construction of new homes in east Jerusalem, said the EU's foreign policy chief Javier Solana. "That may put in jeopardy the peace process," he added. Israel, which annexed east Jerusalem after the Six Day War, considers the area to have full legal status under Israeli law and that normative building regulations apply to all sections of the city. Government officials on Monday said that for this reason, the prime minister had no intention of stopping east Jerusalem construction projects. Prime Minister Ehud Olmert has ordered a partial freeze on settlement construction and has insisted that all settlement projects require a stamp of approval from his office as well as from the Defense Ministry. But his spokesman, Mark Regev, said the order did not apply to east Jerusalem. The grassroots organization Peace Now, which monitors settlement activity, said that the Neveh Ya'akov plan was just the first step in a larger plan to build in an undeveloped area of the Adam settlement, which abuts the neighborhood. This plan would unofficially enlarge Jerusalem, said Hagit Ofran, who heads Peace Now's settlement watch team. "The settlement freeze has died before it ever started," Ofran said. She even provided a rudimentary map of the area targeted for construction. A spokesman for the Housing and Construction Ministry confirmed that there was such a plan, but added that it was in a very elementary stage and that it was far from being approved. It has not even been evaluated by the ministry, he said. Once it does come before it, the ministry would have to weigh many factors before it could approve it, he said. It would certainly take into account the difference between a West Bank project and a Jerusalem one, he added. Avi Roeh, who heads the Binyamin Regional Council, said that settlers had many construction plans they would like to advance, including the Adam one, but that at present there was little hope the government would approve such projects. Since last summer, the Defense Ministry - which is in charge of settlement construction - has refused to grant new permits for construction, even though building has continued on already-issued permits. On Sunday, the prime minister made an exemption to the policy when he authorized a 750-unit construction project for a new ultra-Orthodox community in the Givat Ze'ev settlement, some five kilometers over the Green Line in the Jerusalem area. That project also drew the ire of the international community. A spokesman for the British Foreign Office said Monday, "We are concerned by reports that Israel plans to build in the settlement of Givat Ze'ev. We see this as unhelpful - particularly when Israelis and Palestinians should be focusing on full implementation of their obligations under phase one of the road map, which include freezing all settlement activity, including natural growth." British Foreign Secretary David Milliband has recently stated that the UK believed that all Israeli settlements anywhere in the West Bank are illegal under international law. "We believe they are a serious impediment to a negotiated two-state solution," Milliband said. UN Secretary-General Ban Ki-Moon on Monday called on the Israeli government to halt settlement construction. "Any settlement expansion is contrary to Israel's obligations under the road map and to international law," he said through a statement released by his spokesperson. But Israel has said that it understood it could build in the larger settlement blocs such as Givat Ze'ev. The Givat Ze'ev project was first authorized in 1999 but had been frozen because of the violence of the second intifada. By approving the project, the Prime Minister's Office and the Housing Ministry extended old contracts and did not need to issue new ones. By giving the project the green light, the government also avoided a potential NIS 1.5 billion legal suit from the contractors and avoided a coalition crisis with Shas. Michal Lando and AP contributed to this report.