Israel will build 884 more houses in east Jerusalem, the housing ministry said on Sunday, in a move that enraged the Palestinians who have demanded it as the capital of their promised state. “We will invite tenders for the construction of 121 housing units in Har Homa and 763 others in Pisgat Zeev,” ministry spokesman Eran Sidis said, referring to two neighborhoods in Arab east Jerusalem. Israel occupied and annexed the eastern half of the city after the 1967 war in a move not recognized by the international community or the Palestinians, who have demanded it as their capital in recently revived peace talks. “These offers are being published for the occasion of Jerusalem Day (on Monday), celebrating the 41st anniversary of the reunification of the city,” Sidis said, referring to the occupation of east Jerusalem in the Six Day War. Jerusalem Mayor Uri Lupolianski defended the move, telling public radio it was necessary to address the “urgent need for housing for the Jewish population.” But Palestinians slammed the decision, saying it undermined peace efforts. “We strongly condemn this decision, which is a continuation of similar decisions to expand settlements that have never stopped,” Palestinian senior negotiator Saeb Erakat said. A statement from the office of Palestinian president Mahmoud Abbas called the decision a “dangerous threat” to the peace process, saying it “cannot advance without a complete and total halt to settlement activity.” The Israeli settlement watchdog Peace Now also criticised the move, which it said was part of a larger effort by the Israeli right to preempt the division of the city in a final peace deal. “More settlements in Jerusalem will mean that the physical ability to have compromises between Israelis and Palestinians will be harder,” Peace Now director Yariv Oppenheimer said. A spokesman for the Egyptian foreign ministry called the decision “a veritable strike against the hope of finding a solution to the Palestinian issue,” and condemned the “silence” of the international community. Egypt called on the US administration and the other main sponsors of the peace processe to “stop these projects."