The Jerusalem municipality says it is pressing forward with a plan to build a controversial new housing development in east Jerusalem.

In a statement Wednesday, the municipality said Deputy Mayor Kobi Kahlon has signed an order approving the construction of some 2,500 homes in Givat Hamatos.

The announcement came as Israeli Prime Minister Benjamin Netanyahu was meeting President Barack Obama at the White House.

The Palestinians claim east Jerusalem, which was captured by Israel, as the capital of a future state. While Israel considers east Jerusalem as part of its capital, the U.S. and most of the international community consider such construction projects to be illegal settlements.

The project is contentious because it would complete a band of Jewish areas that separate Jerusalem from nearby Bethlehem.