The move came as four European members of the U.N. Security Council issued a joint statement condemning new settlement building, The New York Times reported. U.N. Secretary General Ban Ki-moon at his annual end-of-year news conference said Israel was endangering the possibility of a "viable Palestinian state."
In Jerusalem, the Housing Authority approved building 2,610 houses or apartments in Givat Hamatos, a new neighborhood in an area that was annexed in the 1967 Six-Day War. The action came after 2,000 units were approved Monday and Tuesday in Givat Hamatos and other areas in Jerusalem.
The Housing Ministry authorized 1,000 more housing units on the West Bank.
"This gravely threatens efforts to establish a viable Palestinian state," Ban said. "I call on Israel to refrain from continuing on this dangerous path, which will undermine the prospects for a resumption of dialogue and a peaceful future for Palestinians and Israelis alike."
The United States was the only Security Council member to refrain from signing on to one of the statements condemning the construction, the Times said. Britain, France, Germany and Portugal, in a joint statement, called the settlements illegal.
While Palestinian leaders say East Jerusalem should be the capital of their state, Israeli Prime Minister Binyamin Netanyahu insisted the entire city is now part of Israel.
"Jerusalem has been the capital of the Jewish people for 3,000 years," Netanyahu said in a statement. "I want you to ask any of you to imagine that you would limit construction in your own capital. It doesn't make sense."