Israel gave preliminary approval on Monday for 130 new apartments in the disputed east Jerusalem, the area the Palestinians want as the capital of their hoped-for state.

Monday’s decision by Jerusalem city authorities comes as peace talks between Israel and the Palestinians are at a standstill over building in the West Bank and east Jerusalem.

City Hall spokesman Elie Isaacson said the new housing was approved for Gilo, a Jewish housing development in east Jerusalem. The project, which would switch a planned hotel into an apartment complex, still needs final approval from Israel’s Interior Ministry to go ahead.

“As far as we know there is no freeze in Jerusalem. Jerusalem municipality is continuing to build in all parts of city, both for Jews and for Arabs,” Mr. Isaacson said.

Peace talks resumed in September but collapsed shortly after as a 10-month curb on West Bank settlement building expired.

U.S. attempts to draw both sides back to the table have stalled. Israel says it is waiting for written diplomatic and security assurances from Washington before committing to a new settlement moratorium in the West Bank. Israeli officials have said east Jerusalem, will not be subject to any construction freeze.

The Palestinians say they won’t restart negotiations without a building freeze in the West Bank and east Jerusalem. They say continued Israeli settlement construction on lands claimed by the Palestinians shows that Israel is not serious about pursuing peace.

“It’s very clear cut that Israel has just decided to defy the international will and Israel has made sure that it opts for the settlement enterprise and not political settlements,” said Husam Zomlot, a spokesman for the Palestinian government.

About 200,000 Jews live in east Jerusalem, more than a quarter of the city’s population, alongside 250,000 Arabs.

Palestinians want the eastern part of Jerusalem as the capital of their future state. Israel says east Jerusalem, captured in the 1967 Mideast war, is an inseparable part of its capital.

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