JERUSALEM (AFP) -- Israel has approved construction of a new Jewish enclave in the heart of a Palestinian neighborhood of annexed East Jerusalem, state-owned Channel One TV reported Wednesday.

The channel said the 14-home project, to be named Maale David, was approved late Wednesday by the Jerusalem city council's planning committee and was likely to spark fresh international condemnation of Israel's settlements policy.

It is to be sited in the Palestinian neighborhood of Ras al-Amud, near an existing Jewish settlement of 1,000 people, the report said.

"By this decision the committee is throwing oil on the flames... encouraging the settlers (and) their very explosive and problematic presence in this neighborhood," Yudith Oppenheimer, of Israeli NGO Ir Amim which lobbies for co-existence in Jerusalem, told the channel.

"We condemn this Israeli step very strongly," PLO official Saeb Erekat told AFP, adding a call for international support for a Palestinian appeal to the UN security council to intervene against the settlement.

Earlier on Wednesday, the executive committee of the Palestine Liberation Organization decided to seek a Security Council meeting on the issue, Erekat said.

"The Palestinian leadership has decided ... to go urgently to the Security Council to stop these settlement plans, which aim to prevent the implementation of the two-state solution," he said.

"We took the decision to begin preparing a Security Council resolution to stop these practices," he added. He said "consultations" with the council would begin immediately.

Last month, the Israeli housing ministry invited tenders for the construction of more than 800 new homes in Har Homa and Pisgat Zeev, two settlement neighborhoods in occupied and annexed East Jerusalem, as part of a response to a successful Palestinian bid to join UNESCO.

On November 1, Israel's inner cabinet decided to speed up construction of homes for Jews in Palestinian East Jerusalem and in other nearby settlements to punish Palestinians for joining the UN agency a day earlier.

The initiative brought statements of concern from the international community.

Israeli construction of Jewish-only settlements on occupied Palestinian land remains one of the thorniest issues of the Israeli-Palestinian conflict, scuppering direct negotiations that began in September 2010 and ground to a halt shortly afterward when a 10-month Israeli settlement freeze ended.

In May this year, the speaker of Israel's parliament and two ministers attended the dedication of a previous batch of Jewish settler homes at Ras al-Amud, on the slopes of the Mount of Olives, overlooking the flashpoint Al-Aqsa mosque compound and close to the center of East Jerusalem.

The international community has repeatedly called on Israel to stop new building projects in East Jerusalem, which it captured from Jordan in the 1967 Six Day War and annexed shortly afterward.