For the second day in a row, the Obama adminstration criticized Israel on Tuesday for its decision to build new housing units in the northern Jerusalem neighborhood of Ramat Shlomo, often wrongly described by anti-Israeli media as an "illegal settlement in east Jerusalem".

“We are deeply disappointed that Israel insists on continuing this pattern of provocative action,” State Department spokeswoman Victoria Nuland told reporters. “These repeated announcements and plans of new construction run counter to the cause of peace.

"Israel’s leaders continually say that they support a path towards a two-state solution, yet these actions only put that goal further at risk,” she added.

The language used by Nuland was stronger than in her statements on Monday, when she called on Israel to refrain from unilateral actions and said that the American position regarding Jewish construction in "settlements" has not changed.

Despite the strong remarks, however, Nuland said the United States did not believe pursuing condemnation of Israel at the UN Security Council would be “helpful” in resurrecting the stalled peace process.

“We again call on Israel and the Palestinians to cease any kinds of counterproductive, unilateral actions and take concrete steps to return to direct negotiations,” she said.

On Monday, the Interior Ministry decided to go ahead with plans to build 1,500 new homes in Ramat Shlomo, though it reduced the number of homes to be built, which was originally set to 1,600.

The Ramat Shlomo project, which has dragged on for years, has yet to see one shovel touch the ground. Nevertheless, a routine announcement involving part of the processing set off a diplomatic firestorm during a visit to Israel by U.S. Vice President Joe Biden in March 2010. After receiving basic authorization by Interior Minister Eli Yishai in August 2011, the plan was quietly shelved.

Two weeks ago, it was revived in the wake of the de facto recognition of the Palestinian Authority as a sovereign state by the United Nations General Assembly, which passed a resolution approving its new status as a non-member observer state.

Ramat Shlomo is located in northern Jerusalem, between Ramot with 60,000 Jewish residents and the Har Hotzvim Industrial Park. The area was empty hills before the reunification of the city in 1967.

The Palestinian Authority said Monday night it will file a complaint with the United Nations Security Council over the progress in the construction plans.

Nabil Abu Rudaineh, a spokesman for PA Chairman Mahmoud Abbas, called the the plan a “blatant challenge” to the international community and a “disregard for the feelings of the Palestinian people and Arab nation.”

He claimed that Monday's decision by the ministry's planning committee would further isolate Israel “after the whole world... recognized the Palestinian state in the 1967 borders.”