Israel has approved the construction of 930 new housing units in the West Bank settlement of Har Homa on August 7.
The approval of the Jerusalem zoning committee on August 4th have made the land available for sale to contractors. Construction is expected to take over two to three years.
The interior ministry announced that 20% of the apartments will be in small sizes and affordable prices.
Timing of such announcement is not accidental, as Israel is experiencing a mass protests against rising housing prices and costs of living.
Israel is faced with rising house prices and rents, low salaries, high cost of raising children and others. Meanwhile, unemployment rate has fallen by 5 per cent with the GDP annual growth of 4.7 per cent.
Israeli science minister Daniel Hershkowitz ahead of the weekly cabinet meeting in Jerusalem said, "I think that this is a part of the answer that we have to give to the shortage in apartments and housing unites in Israel and Har Homa it's one of the newer neighbourhoods of Jerusalem although it already has quite a few thousands of apartments. It's a wonderful neighbourhood by the way, my daughter has apartment there. Anyhow, I think this is ...it's one of the solutions that the government is going to offer to the shortage."
The new housing plan could slow down U.S. and EU efforts to renew talks frozen since last year in anticipation of Palestinians to seek a unilateral United Nations mandate for statehood in September.
Hagit Ofran of "Peace Now" group said, "The government of Israel is taking advantage of the riots in Israel on the housing issue, and encouraging the Israelis to move to settlements because of economic reasons. This is something that we see as against the Israeli interest and might prevent the two-state solution."
Netanyahu's government, dominated by pro-settler parties, had rejected calls to stop the construction saying it had already observed a 10-month building pause from late 2009.
Daniel Hershkowitz, Israeli science minister
Hagit Ofran of "Peace Now" group