Israel's premier is vowing to continue building in a contested Jerusalem district, just days after European Union criticism.

Benjamin Netanyahu spoke Tuesday in Gilo, a neighborhood near Bethlehem in territory the Palestinians want for their future state. Israel annexed Gilo to Jerusalem in 1967, a move the world has not recognized.

The EU condemned plans to build 800 Israeli homes there.

"We have built in Jerusalem, we are building in Jerusalem and we will continue to build in Jerusalem," Netanyahu said. this is our policy."

The fate of Jerusalem is one of the most emotional issues in long-stalled Israeli-Palestinian peace efforts. Palestinians say they won't resume talks unless Israel stops building in areas they claim. Israel says all issues, including, territorial disputes, must be resolved through negotiations.