Updated

Israeli officials on Tuesday deposited a plan to build 900 more housing units in a Jewish neighborhood in the part of Jerusalem claimed by Palestinians, drawing criticism from the Palestinians, the United States and Britain.

By depositing the plan, the Jerusalem district planning commission opened the proposed project to comments, objections and appeals from the public. Jerusalem city spokesman Gidi Schmerling said final approval was "many months" away.

Palestinian negotiator Saeb Erekat responded to the move by charging that there is no point in talking peace while Israel expands Jewish neighborhoods in east Jerusalem.

"We condemn this in the strongest possible terms," Erekat said Tuesday. "It shows that it is meaningless to resume negotiations when this goes on."

In Washington, the White House and State Department called the Israeli plan "dismaying."

A statement from White House spokesman Robert Gibbs criticized unilateral steps by Israel and said the issue of Jerusalem "must be resolved through negotiations between the parties."

Britain also criticized the plan to expand the sprawling neighborhood of Gilo, where about 40,000 Israelis live.

"The Foreign Secretary has been very clear that a credible deal involves Jerusalem as a shared capital," a British statement said. "Expanding settlements on occupied land in east Jerusalem makes that deal much harder. So this decision on Gilo is wrong and we oppose it."

Jerusalem and settlements are key sticking points in Israeli-Palestinian negotiations. Israel captured east Jerusalem in the 1967 Mideast war and annexed it, but no other country recognized that move. About 180,000 Israelis live in neighborhoods built around east Jerusalem.

Israel insists that east Jerusalem is part of Israel and rejects efforts to restrict building there. Palestinians consider the Jewish neighborhoods there as settlements.

Palestinian President Mahmoud Abbas has demanded a halt to construction in Israel's West Bank settlements before peace negotiations can resume. Israel has rejected the demand, while pledging not to build new settlements. However, Israel does not include building in east Jerusalem in that category.

In past peace negotiations that broke down without agreement, formulas have been raised to allow Israel to keep its new Jerusalem neighborhoods, while Palestinians would receive control of Arab sections of the city and land from Israel to compensate for the neighborhoods and West Bank settlements Israel would keep.

A main conflict surrounds the key holy site in the Old City, where the Al Aqsa Mosque compound sits atop the ruins of the biblical Jewish Temples. Both sides claim sovereignty over the site.