Israel's interior minister gave final authorization to build 1,600 apartments in disputed east Jerusalem and will approve 2,700 more in days, officials said Thursday, detailing a plan that could complicate diplomatic efforts to dissuade Palestinians from declaring statehood at the United Nations.

The announcement drew immediate criticism from the Palestinians, and from Israel's leading anti-settlement group, which accused the government of seizing on mass protests over housing costs to give economic justification to the always explosive issue of building in the holy city.

Prime Minister Benjamin Netanyahu's office knew the construction plans were moving ahead, Interior Ministry spokesman Roi Lachmanovich said. An earlier approval for the 1,600-apartment project embarrassed Netanyahu and caused a diplomatic rift with the U.S. because it coincided with a visit to Israel by U.S. Vice President Joe Biden.

Palestinians oppose all Israeli construction in east Jerusalem because it chips away at their hopes to establish the capital of a future state in the holy city. The approval for the new apartments also could create new problems for Washington, which is trying to persuade the Palestinians to abandon their statehood bid and enter into negotiations with Israel instead.

Senior Palestinian official Saeb Erekat accused Israel of favoring settlements over peace.

"We call upon the U.S. administration to support our endeavor at the U.N. because the only way to preserve the two-state solution now is the admittance of the state of Palestine," he said.

Lachmanovich, the ministry spokesman, said the new apartments were necessary to address a housing shortage in the city.

"There's always something pending," he said, when asked about the timing of the approvals.

Actual construction likely will not begin for years because building plans will have to go through multiple approval processes.

The Peace Now anti-settlement group accused the government of "cynically" exploiting a sweeping grassroots uprising sparked by high housing prices to cement its plans to build new apartments in Jerusalem's contested eastern sector.

It was also unlikely to win much favor with Israel's closest ally, the United States, which opposes the Palestinians' statehood bid and, like Israel, says negotiations on Jerusalem and other core issues are the only way forward.

Jerusalem's fate "needs to be negotiated between the two parties," said U.S. Embassy spokesman Kurt Hoyer. "Unilateral actions on either side that appear to prejudice the outcome of those negotiations we find counterproductive."

On Tuesday, Washington rebuked Israel for advancing separate plans to build 930 apartments in another neighborhood of east Jerusalem.

The Palestinians refuse to negotiate with the Netanyahu government as long as it continues to build in the West Bank and east Jerusalem — territories that would form the core of their future independent state.

Israel rejects that demand, arguing that previous rounds of talks moved ahead in tandem with settlement construction.

Israel annexed east Jerusalem in 1967 after capturing it from Jordan. It does not consider the Jewish neighborhoods it has built there to be settlements even though the international community makes no such distinction and does not recognize Jerusalem's annexation.

About 500,000 Jews have made their homes in east Jerusalem and the West Bank since 1967.

Adding to the potential for political tension is the Palestinians' plan for even a symbolic endorsement of statehood by the United Nations.

At home, they are trying to whip up enthusiasm through a series of mass rallies. But after two bloody uprisings against Israel, the Palestinians have little appetite for a third, and officials drafted a plan to keep the rallies peaceful, they said Wednesday.

Under the plan shown to The Associated Press, marches and rallies inside West Bank cities are permitted, but the gatherings will be confined to city limits. Demonstrators will be kept away from flashpoints like Israeli settlements and military checkpoints. Palestinian police would ring West Bank cities to keep protesters far from Israelis.

A wild card in the deck is Gaza, which is run by the Islamic militant Hamas group. The group is disdainful of the statehood plan to be implemented at the U.N. and will likely not organize protests to support it. But if violence erupts in the West Bank, Gaza could be expected to follow.

Israeli officials disagree over what might happen in September.

One government-commissioned study said the rallies will likely be peaceful, but Foreign Minister Avigdor Lieberman has predicted "unprecedented violence."