The Jerusalem Municipality will reportedly fast-track approval for thousands of new homes in areas of the city east of the Green Line, including a much-disputed neighborhood in the city’s north and an entirely new neighborhood in the city’s south, Israeli media reported Monday night.

The move will likely further exacerbate tensions that have arisen since Israel announced Friday it would step up settlement construction as a response to the Palestinians’ upgraded status at the United Nations.

Some 1,700 units are scheduled for approval by the municipality in Ramat Shlomo, a largely ultra-Orthodox neighborhood on the northern outskirts of the city. The construction plans were initially okayed a year ago, during a visit by US Vice President Joe Biden.

The plans were frozen after an international outcry over the timing of the approval, which were seen as disrespectful to Washington.

The municipality will also green-light the construction of the first new neighborhood beyond the Green Line since the 1997 decision to build Har Homa.

Thousands of apartments are to be approved in Givat Hamatos, located next to the Jewish neighborhood of Talpiot and the Arab neighborhood of Beit Safafa.

Israel captured East Jerusalem and the Old City in the 1967 war, and subsequently annexed them, later building Jewish neighborhoods in the eastern part of the city, which it considers its undivided capital. More than 200,000 Israelis are now estimated to live in Jewish neighborhoods established over the Green Line.

The reports of the planned new construction in Jerusalem came amid a diplomatic uproar that erupted over Israel’s announcement to build a separate 3,000 new homes in the West Bank and other parts of East Jerusalem. This government-announced plan includes intended construction in the sensitive E1 corridor between Jerusalem and the settlement of Maaleh Adumim.

The move, which Israel said is retaliation for the UN’s upgrading of the Palestinian Authority to a nonmember observer state last Thursday, has been widely condemned around the world. On Monday, the US urged Israel to backtrack, and several ambassadors in European capitals were called in for rebuke by their host countries. Britain and France were reported to be considering recalling their ambassadors from Tel Aviv for consultations, though France denied this.

An official in the office of Prime Minister Benjamin Netanyahu, however, said Israel would “fulfill its vital interests even in the face of international pressure and will not reverse its decision.”