The Israeli Interior Ministry has announced today that 900 new housing units are slated to be built by Israeli officials at the Gilo settlement located in East Jerusalem.  
A press release by the Interior Ministry read, "The planning and construction committee has authorised the construction of 900 housing units in the Gilo neighbourhood in Jerusalem."   
Annexed after the 1967 war, East Jerusalem is what Palestinians still hope to make the capital of their future state.  However, the current Israeli government has made claim to Jerusalem as the capital of Israel.  "Jerusalem is Israel's capital and will remain as such," said government spokesman Mark Regev.
Earlier this month the Palestinian Authority insisted that all negotiations with Israel would be put permanently on hold until settlement expansion and home demolitions were halted.  The UN reports that 1,500 home demolition orders in East Jerusalem are currently pending in Israeli courts. At least 600 Palestinians have been displaced from their homes in East Jerusalem since the beginning of this year.  Nearly 500,000 Israelis live in more than 100 different settlements located in Jerusalem and the West Bank.   
U.S envoy to the Middle East, George Mitchell, asked President Benjamin Netanyahu to cancel settlement expansion plans, however his request went unheeded.  Settlement expansion has soured relations between the U.S and Israel, however Israel is still the largest recipient of U.S aid annually.  Responding to requests by the U.S government that settlement expansion be halted Jerusalem Mayor Nir Barkat said that he, "strongly objects to the American demand to halt construction in Jerusalem and will allow construction for Jews, Muslims, and Christians in any part of Jerusalem without prejudice.  The demand to halt construction by religion is not legal in the United States or in any other free place in the world."
Under international law building settlements in occupied territory is illegal.  The UN has deemed Israeli settlements to be a violation of the Geneva Convention.

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Israel announces settlement expansion plans