The city council on Monday approved the building of another 122 Israeli settler homes in occupied East Jerusalem, a councilor said, a move likely to bring fresh censure from the international community.

Elisha Peleg, head of the conservative Likud group on the city council, told AFP its planning and construction committee had given the green light for construction of 90 housing units in Talpiot East and another 32 in Pisgat Zeev.

"It's no big deal," he said. "It's routine construction, we're always building in Jerusalem neighborhoods ... does anyone know where the [dividing] line was? It's not Berlin where they had a wall."

On Sunday, the city said it was planning to add 1,400 new homes to the East Jerusalem settlement of Gilo, one of the first and largest Jewish-only districts in Jerusalem that Israel has built on land captured in the 1967 Six-Day War.

That announcement drew criticism from the international community, from Israeli left-wing politicians and activists, as well as Palestinian condemnation.

"We strongly condemn this Israeli escalation and continued decisions in the area of settlements and the imposition of new facts on the ground," chief Palestinian negotiator Saeb Erakat told AFP.

At the United Nations in New York, Arab ambassadors held talks Monday on when to put before the Security Council a resolution condemning Israeli settlement in the occupied territories.

The Palestinians want the resolution passed to put pressure on Israel's Prime Minister Benjamin Netanyahu over the settlements. But US opposition to the resolution is at the heart of the timetable, diplomats said.

The Security Council is to hold a meeting on the Middle East and the Israeli-Palestinian conflict on Wednesday.

The draft resolution could be submitted for then, but some Arab nations want to wait a few extra days in hope of persuading the United States to support the move.

US-brokered peace negotiations between Israel and the Palestinians have deadlocked over the issue of illegal Israeli settlements in the occupied West Bank and East Jerusalem.

The Palestinians walked out of direct peace talks three weeks after they started in September when Israel baulked at extending a 10-month partial freeze on settlement construction in the West Bank.

They refuse to negotiate with Israel while it builds on land they want for a future state.

In March 2010, the Israeli Interior Ministry announced plans to build 1,600 settler homes in Ramat Shlomo, a Jewish Orthodox neighborhood in occupied East Jerusalem.

The announcement, which came as US Vice President Joe Biden was visiting Israel, provoked fierce American opposition and soured relations with Washington for several months.