Israeli municipal officials have approved the building of 40 apartments in a Jewish neighborhood in Jerusalem's disputed eastern sector.

The move could undermine efforts to restart direct Israeli-Palestinian peace talks. It comes as U.S. peace envoy David Hale is visiting the region.

Municipality spokesman Stephen Miller confirmed the approval and said on Tuesday that construction would continue for residents of all faiths in Jerusalem.

Palestinians say building in east Jerusalem goes against their efforts to establish a state on the territory Israel captured in the 1967 Mideast war. Palestinians want east Jerusalem as their future capital.

Israel annexed the sector after the 1967 war but the annexation isn't internationally recognized.