Israeli officials formally submitted plans for a new neighborhood in southern Jerusalem in what Peace Now complains will be the first wholly new development in 14 years.

"Unlike recent plans that caused controversy in Gilo and Pisgat Zeev which expanded the footprint of existing neighborhoods, the new plan creates an entirely new footprint of a new Israeli neighborhood in 'occupied East Jerusalem'," Peace Now said in a statement.

The new neighborhood, to be built at Givat HaMatos, is slated to be built in the southern reaches of Jerusalem near Bethlehem. Peace Now said it would be the first such expansion since Har Homa in 1997.

At present there is a community of Ethiopian Jews living in caravans on 170 dunams at Givat HaMatos. The new plan calls for the caravans to be removed in order that some 4,000 housing units can be built on an area of 1,060 dunams.

The establishment of Har Homa in 1997, when Prime Minister Benjamin Netanyahu was serving his first term as premier, infuriated peace activists, left-wing politicians, and Palestinian Authority officials who worried its construction would complete a ring of Jewish communities around the eastern reaches of Jerusalem, effectively cutting it off from nearby Arab towns in Judea and Samaria.

The new neighborhood will reportedly sit on land between Gilo and Har Homa in what Peace Now described as "a game changer that significantly changes the possible border between Israel and Palestine."

"The new neighborhood will complete the isolation between Bethlehem and occupied East Jerusalem, and will destroy any possibility of a territorial solution in Beit Safafa and Shurafat," the group said, referring to two Arab neighborhoods.

In recent months Israel's government has quietly exercised its prerogative under laws dating to the Ottoman era to claim fallow lands in southern Jerusalem in order to normalize the status of Jewish communities near Bethlehem, and ultimately, to pave the way for the new Givat HaMatos project.

Sources close to the Yesha council at once applauded the decision to build a new community and decried the Netanyahu government’s reticence to use the same laws to normalize the status of neighborhoods in Judea and Samaria facing demolition orders.