OCCUPIED JERUSALEM: Israel’s Jerusalem municipality approved Wednesday plans for another 130 housing units in Gilo, a settlement neighborhood in the eastern sector of the Holy City, and backed plans for a large tourism complex in the heart of a flashpoint neighborhood of Arab East Jerusalem, a city councilor told AFP.

Pepe Alalu of the left-wing Meretz party said the district planning committee had given the green light to a project to build 130 homes in three 12-storey tower blocks on the eastern outskirts of Gilo, which lies just a few kilometers north of Bethlehem.

“An agreement has been reached for construction of 130 apartments in three towers of 12 stories each,” he told AFP, saying it was the second stage of approval, meaning construction was likely to begin “in about three years.”

The Gilo project received initial approval in November last year, in a move the Palestinians said was an attempt to further isolate Bethlehem from East Jerusalem.

“I guess this is the New Year message that the government of Israel is sending us for 2012: We will continue destroying the peace process and killing the two-state solution through continuing and escalating settlement activity,’” remarked Palestinian negotiator Saeb Erekat.

“The Quartet and the international community must hold the government of Israel fully responsible for these policies if they want to save the peace process and the two-state solution.”

The Middle East Quartet, which comprises top EU, U.S., U.N. and Russian diplomats, has been badgering the two sides to return to direct negotiations with next to no success, with each party blaming the other for sabotaging peace efforts.

Last week, Britain, France, Germany and Portugal issued a joint statement condemning Israel’s accelerated settlement building, saying it sent a “devastating” message, and urged the Jewish state to reverse the plans.

On Nov. 1, Israel’s inner Cabinet decided to speed up construction of homes for Jews in Arab East Jerusalem and in other nearby settlements to punish the Palestinians for winning membership in the United Nations cultural agency, UNESCO.

Since then, Israel has issued announcements for 2,057 new homes in East Jerusalem and 1,241 in the West Bank, official figures show.

Israel’s settlement building is one of the most intractable disputes of the conflict with the Palestinians and has frequently floored efforts to broker a peaceful solution.

Direct talks broke down in autumn 2010 after Israel failed to extend a temporary freeze on new West Bank construction with the Palestinians refusing to talk unless they renewed it and also extended the ban to East Jerusalem.

More than 310,000 Israelis live in settlements in the occupied West Bank, and the number is constantly growing.

Another 200,000 live in a dozen settlement neighborhoods in East Jerusalem, which was captured by Israel in 1967 and annexed in a move never recognized internationally.

The international community considers all settlements in territories occupied by Israel since June 1967 to be illegal, whether or not approved by its government.

Alalu also told AFP Wednesday that the municipality authorized the construction of a tourist complex that includes 250 parking spaces, an archaeological park, an events hall and a library, adding that the complex would be built in Silwan, which lies immediately south of the Old City walls.

“Jerusalem municipality attaches great importance to the development of this tourism and archaeology site in David’s City which is visited by hundreds of thousands of visitors and tourists every year,” municipal spokesman Stephan Miller told AFP.

“The plans which were presented to the city council will allow for the establishment of visitors’ centers, exhibition centers, a conference hall and other facilities which will allow the most important archaeological finds discovered at the site to be put on display,” he said.

But local Palestinian activists lashed out at the move, saying it was another step in Israel’s plans to take over their neighborhood.

“Israel has allowed the settler organization Elad to build a huge project in Silwan, covering 8,400 square meters,” said Fakhri Abu Diab, head of the Silwan Defense Committee.

He said approval of the project was granted on the same day the municipality handed out further demolition orders for homes in Silwan, dozens of which have already been condemned for being built without a permit.

“Today the municipality also distributed demolition orders for houses in Silwan,” he said.

“They handed out 10 administrative demolition orders which means these houses will never get a building permit.”

The densely populated neighborhood, which is built on the steep hillsides just south of the Old City, has seen regular clashes between locals and a 400-strong community of hard-line Jewish settlers.