Construction site
Construction siteFlash 90

The European Union (EU) on Friday condemned Israel'splans to build 2,610 new homes in a Jewish neighborhood in Jerusalem, calling it "highly detrimental" to diplomatic efforts for Israeli-Palestinian peace, according to AFP

Brussels called on Israel to "urgently reverse" actions leading to expansion in Jerusalem, which the Palestinian Authority (PA) hopes to claim as the capital of a future state, following a smear campaign against the project launched by extreme leftist group Peace Now. 

"This represents a further highly detrimental step that undermines prospects for a two-state solution and calls into question Israel's commitment to a peaceful negotiated settlement with the Palestinians," the EU's diplomatic service said.

The housing units, which have been slated for construction since 2012 in the neighborhood of Givat Hamatos, were given final approval last week. 

The EU also condemned Israel for allowing Jews to move into buildings legally transferred from Arab to Jewish ownership in Silwan, a neighborhood close to the City of David historical site and the Western Wall. 

The EU took the opportunity to once again threaten Israel, saying that the "future of EU-Israel relations" depends on Israel's "commitment to peace." 

The bloc has threatened Israel multiple times to further its agenda in the Middle East, dangling unprecedented aid packages to both Jerusalem and Ramallah if a two-state solution is implemented. Despite this, it has denied threatening Israel - or promoting the Boycott, Divestment, and Sanctions movement - on multiple occasions. 

The project has also drawn sharp criticism from France, as well as the United States, with President Barack Obama on Wednesday telling Israeli Prime Minister Binyamin Netanyahu of Washington's "deep concern" over the proposed development.

In response, Netanyahu issued a sharp rebuke, reportedly telling Obama during an in-person meeting to "check the facts" before issuing criticism.