Israel's prime minister vowed on Sunday to continue building in east Jerusalem, despite objections from Palestinians who claim the territory as capital of their hoped-for state.
Benjamin Netanyahu spoke Sunday after the European Union's foreign policy chief criticized plans to build 800 new apartments and a military college on contested land.
"We are not imposing any restrictions on construction in Jerusalem" Netanyahu told his Cabinet. "It is our capital."
A top aide to Palestinian President Mahmoud Abbas promptly accused Netanyahu of deliberately destroying prospects for peace.
The Israeli leader's comment "comes in the context of the continuing destruction of the peace process and the two-state solution," Nabil Abu Rdeneh said.
The fate of Jerusalem lies at the heart of the Israeli-Palestinian conflict. The Palestinians refuse to negotiate while Israel continues to build settlements in east Jerusalem and the West Bank, areas captured by the Jewish state in 1967.
Netanyahu has rejected the notion of partitioning the city.