Aides close to Yishai said the minister is trying to ease the housing shortage in the capital, Ynetnews.com said Thursday.
The move to approve 4,300 housing units in Jerusalem is likely to draw fresh international condemnation.
Yishai Thursday approved 1,600 housing units in Ramat Shlomo in northeast Jerusalem, Ynetnews.com and Army Radio reported.
In the coming days he plans to approve construction of 700 housing units in Pisgat Ze'ev in East Jerusalem and 2,000 units in Givat Hamatos in southern Jerusalem, Ynetnews.com said. Both neighborhoods are over the Green Line, in areas Israel annexed following the Six Days War.
Last year during U.S. Vice President Joe Biden's visit to Israel, Yishai approved construction of 1,600 units in Ramat Shlomo. The move drew a sharp rebuke from Biden, who said it would undermine the peace process. Israel-U.S. ties were affected and Prime Minister Binyamin Netanyahu imposed a freeze on construction.
Thursday's announcement came days after the ministry's Housing and Planning Committee approved 700 housing units in Har Homa, drawing sharp condemnation from the United States and European Union.