JERUSALEM (AFP) -- Israel's Jerusalem municipality approved the expansion of 2,000 homes in the settlement district of Ramat Shlomo in occupied East Jerusalem on Sunday, allowing each Israeli home to add an additional room, a council press statement said.

The announcement of new settlement activity came as Israeli Defense Minister Ehud Barak told France 24 television that, "there is no real way to announce an end to construction. There's half a million people living there."

Palestinian Authority officials were quick to condemn the statement.

All settlement activity is considered illegal under international law and settlements are one of the major obstacles to a peace agreement.

Israel has occupied the West Bank, Gaza Strip and East Jerusalem since 1967.