A deal between the Ministry of Housing and the Jerusalem municipality, which would expand the East Jerusalem neighborhood of Har Homa by 930 housing units, is expected to be approved Monday by the municipality’s finance committee, paving the way for the construction of the controversial new neighborhood.

The Housing Ministry has agreed to provide the city with funding to largely cover infrastructure costs for the new neighborhood, which would effectively slash the cost of new apartments by some NIS 100,000 (some $27,000), Maariv reported on Sunday.

The plan for the new neighborhood, called Har Homa C, was approved in 2011 and then shelved due to political reasons. Approval of the funding deal by the Jerusalem municipality is the final step before the issuing of construction tenders for the project.

Like all Israeli construction in East Jerusalem, the building of Har Homa C is politically controversial. It would expand the neighborhood to the edge of the Palestinian village of Sur Baher and cut off the area from Bethlehem, in the West Bank, theoretically preventing territorial continuity in that area of a future Palestinian state.

“Approval of the agreement between the municipality and the government proves that the temporary freeze in construction beyond the Green Line is over,” Jerusalem city council member Elisha Peleg (Likud) told Maariv, and added that freezing construction in Jerusalem “does nothing” to help the peace process with the Palestinians and contributes to the housing crisis in the city.

The municipality vote would come on the heels of a diplomatic visit by US Secretary of State John Kerry, who spent the weekend shuttling back and forth between Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas in an effort to bring the two sides back to the negotiating table.

Announcements of building approval for areas beyond the Green Line have coincided with visits by foreign diplomats in the past. The approval of Har Homa C, council member Peleg said, “makes clear to the American administration and the European Union that Israel will not tolerate interference in its internal affairs.”