The speaker of Israel's parliament and two ministers attended the dedication on Wednesday of new Jewish settler homes in East Jerusalem in what an Israeli NGO called "a dangerous provocation."

Among the first of the VIPs to arrive at the site in the city's annexed eastern sector were speaker Reuven Rivlin, Environment Minister Gilad Erdan and Education Minister Gideon Saar, all of Israeli Prime Minister Benjamin Netanyahu's right-wing Likud party.

The ceremony, in which Israel's Jerusalem Mayor Nir Barkat also took part, came the day after Netanyahu reaffirmed Israel's claim to all Jerusalem -- half of which was occupied in 1967 and illegally annexed to Israel in the 1980s. East Jerusalem is not officially recognized as part of Israel's capital.

"I think that the prime minister expressed the consensus in Israeli society that a united Jerusalem is the capital of Israel," Erdan told reporters at the settler ceremony.

The new homes are in the Jewish-only enclave of Maaleh Zeitim, in the Palestinian neighborhood of Ras Al-Amud, where another 50 settler apartments were completed in 2003. On the slopes of the Mount of Olives, overlooking the Al-Aqsa Mosque compound, it is close to the center of Palestinian East Jerusalem.

Rivlin welcomed the latest completions.

"I am happy about all building in Jerusalem, which is part of the state of Israel," he told reporters.

A third phase of the development is subject to a Jerusalem magistrates court hearing set for Thursday in which a Palestinian family whose home is slated for demolition because it stands in the path of further settler building are to fight an eviction order.

Maaleh Zeitim was financed by American millionaire Irving Moskowitz, according to Israeli NGO Ir Amin, which advocates equitable division of Jerusalem between Israel and the Palestinians.

Moskowitz has bankrolled other settlement projects in the occupied West Bank, including East Jerusalem.

"The continuing settlement activity in East Jerusalem, which has gained support of government ministers and Knesset members, is a dangerous provocation that is intended to sabotage any chance of reaching a political settlement to the Israeli-Palestinian conflict," Ir Amim said in a statement.

In an address to the US Congress on Tuesday, Netanyahu rejected Palestinian claims to occupied East Jerusalem, which is hoped to be the capital of a future state.

"Jerusalem must never again be divided. Jerusalem must remain the united capital of Israel," he said.

The international community has repeatedly called on Israel to stop new building projects in the area, which remains illegal under the Fourth Geneva Convention.

Peace negotiations between Israel and the Palestinians collapsed after Netanyahu's government refused to extend a partial moratorium on settlement expansion in September 2010.

Also Wednesday, Israeli interior minister Eli Yishai was to sign an agreement with Barkat incorporating about 24 hectares (60 acres) of orchards belonging to southern Jerusalem kibbutz Ramat Rachel into the city's jurisdiction, his spokesman said.

A spokeswoman for settlement watchdog Peace Now told AFP that although a small part of the land jutted into the demilitarized zone between Israel and the West Bank it was territory which had never been under Jordanian control and was therefore not considered occupied.

"It's not a drama on the scale of Israel annexing new territory," Hagit Ofran said. "This is land which has always been considered part of Israel."