A Jerusalem committee approved the construction of some 2,500 housing units in East Jerusalem, the deputy mayor of Jerusalem announced Wednesday.

The new units, which are to be built in the Givat Hamatos neighborhood, were given final approval for construction last week on the eve of Rosh Hashana. Preliminary approval to construct the homes was given over a year ago. In response, Israel is receiving international condemnation for approving the new housing units.

Givat Hamatos lies in a highly contested area by Israel and the Palestinians. Israel says the land belongs in territory annexed by Israel while the Palestinians claim the area belongs within the borders of a future Palestinian state.

According to the committee, half of the housing units will be designated for Arab residents while the remaining half will be given to Jews, Army Radio reported.

The anti-settlement leftist organization Peace Now criticized the announcement, calling it “destructive” to peace efforts between Palestinians and Israelis.

“Givat Hamatos is destructive to the two state solution…Netanyahu continues his policy to destroy the possibility of a two state solution. He is doing so in the West Bank, and he is doing so in East Jerusalem,” the group said in a statement.

The announcement came as Israeli Prime Minster Benjamin Netanyahu met with US President Barack Obama at the White House on Wednesday afternoon.

Using very harsh language, spokesperson’s from the State Department and the White House said that the move would distance Israel from “even its closest allies” and calls into questions Israel’s sincerity over its commitment to peace.

State Department spokeswoman Jen Psaki said that the US was “deeply concerned” over the approval of the 2,500 new homes.

“This step is contrary to Israel’s stated goal and it would send a very troubling message if they proceed with tenders or construction,” she said. Psaki added that the move would “call into question Israel’s ultimate commitment to a peaceful negotiated settlement.”

“This development will only draw condemnation from the international community, distance Israel from even its closest allies, poison the atmosphere not only with the Palestinians but also with the very Arab governments with which Prime Minister Netanyahu said he wanted to build relations,” she said.

At the White House, spokesman Josh Earnest echoed Paski’s message and confirmed that Obama and Netanyahu spoke about the issue in their meeting.

“This development will only draw condemnation from the international community,” he said. “It also would call into question Israel’s ultimate commitment to a peaceful negotiated settlement with the Palestinians.”

Earnest also condemned a recent move by Israelis who secretly purchased and moved into seven homes in a nearby Arab neighborhood. The families are part of a right-wing organization that believes that Jews should have a presence in all parts of Israel, even Arab areas.

“The US condemns the recent occupation of residential buildings in the neighborhood of Silwan by people whose agenda provokes tension,” Earnest stated. “It only serves to escalate tensions.”

Commenting on the statements issued by the State Department and White House, Netanyahu told reporters, “I don’t understand this criticism, and I don’t accept this position.”

On the issue of the Israelis moving into Silwan, the prime minister said that the US needs to check its facts. “It’s worth learning the information properly before deciding to take a position like that,” he said.

“Arabs in Jerusalem purchase homes freely in the west of the city and nobody says that’s forbidden. I don’t intend to tell Jews they can’t buy homes in East Jerusalem.”

Jerusalem mayor Nir Barkat also responded to the White House, saying, “I say this firmly and clearly: building in Jerusalem is not poisonous and harmful – rather, it is essential, important and will continue with full force. I will not freeze construction for anyone in Israel’s capital. Discrimination based on religion, race or gender is illegal in the United States and in any other civilized country.

“2,600 apartments in Givat HaMatos that we approved two years ago will enable more young people from all sectors and religions to live in Jerusalem and build their future here, thereby strengthening the capital of Israel,” Barkat said. “We will not apologize for that. “