Kerry was due to arrive in Israel Thursday for the fifth time since taking office Feb. 1 in ongoing efforts to jump start peace talks between Israel and the Palestinians.
The 69 housing units are part of a project approved in August 2011 to construct 1,000 housing units in the neighborhood. Tenders were issued in April 2012, Peace Now, an organization that monitors settlement building in East Jerusalem and the West Bank said.
The contractor who won the bid for the 69 units already had submitted plans to the Jerusalem Municipality Local Planning Committee and was given the go-ahead to start building Wednesday, The Jerusalem Post said.
"We continue to build in all city neighborhoods according to zoning plans for Jews and Arabs. In the coming years, we intend to build tens of thousands of homes throughout the city, for the different population sectors," a municipality statement said.
Har Homa in southern East Jerusalem was built on land annexed to the Jerusalem municipality by Israel after the Six-Day War. The international arena considers the neighborhood a settlement. Israel disputes this.