The European Union on Saturday criticized plans for new construction in Jewish East Jerusalem neighborhoods, saying that Israel’s policy was an “obstruction to peace.”

“The policy of settlement construction and expansion in East Jerusalem continues to undermine the possibility of a viable two state solution with Jerusalem as the future capital of both states, which is the only realistic way to achieve a just and lasting peace,” the statement read.

“The European Union is strongly opposed to Israel’s settlement policy, including in East Jerusalem, which is illegal under international law and an obstacle to peace,” it continued.

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On Thursday, the Housing Ministry published tenders for the construction of 805 housing units in the neighborhoods of Ramot and Pisgat Zeev, the first building to take place in Jewish neighborhoods in East Jerusalem in a year, according to the left-wing NGO, Peace Now.

According to the organization, the planned units will add to the density of the population in the two neighborhoods rather than expanding their boundaries.

Israel captured East Jerusalem in the 1967 Six Day War and later extended sovereignty over it in 1980, in a move never recognized by the international community. The Palestinians regard East Jerusalem as their future capital.

Israel has begun building nearly 20,000 settler homes in the West Bank during the past decade of Benjamin Netanyahu’s premiership, Peace Now said earlier this month. That report did not include East Jerusalem.