Israel has approved the construction of 1,100 homes in the Jewish settlement of Gilo on the outskirts of Jerusalem.
The move comes days after Palestinian leader Mahmoud Abbas called for full UN membership for a Palestinian state.
There has been widespread condemnation of the move by Palestinian and Western powers, including the EU and US.
Almost 500,000 Jews live in settlements on occupied territory. The settlements are illegal under international law, though Israel disputes this.
US-brokered peace talks between Israel and the Palestinians are deadlocked over the issue of Jewish settlements in the occupied West Bank and East Jerusalem.
Also on Tuesday, three UN special rapporteurs called for an immediate end to the demolition of Palestinian-owned homes and other structures in the West Bank, including East Jerusalem.
Surely Israel feels nothing for the PA push for a state at the UNSC. Surely the world feels nothing for Israel. Surely Jerusalem will be divided sooner than we think. Surely this will get ugly…