The United States says it is dismayed that Israel has authorized the construction of new housing units in occupied east Jerusalem.
Israel has approved construction of 900 new units in mostly Arab east Jerusalem despite objections by the United States and the Palestinians.
Speaking to reporters at the U.S. State Department, spokesman Ian Kelly says the Obama administration is deeply disappointed by the Israeli decision.
"We believe that neither party should engage in any kind of actions that could unilaterally preempt or appear to preempt negotiations. I think that we find the Jerusalem planning committee's decision to move forward on the approval process for the expansion of Gilo in Jerusalem as dismaying," said Kelly.
U.S. officials have put pressure on the Israeli government to halt construction of settlements in east Jerusalem and the West Bank.
Israel annexed east Jerusalem following the 1967 Middle East war in a move that is not recognized internationally.
Palestinian President Mahmoud Abbas says peace talks cannot resume until Israel freezes building in the West Bank and east Jerusalem.
So far, Israeli Prime Minister Benjamin Netanyahu has only offered a limited reduction in new building.
Kelly says the latest move hurts U.S. efforts to get both sides back to the negotiating table.
"This is at a time when we are working to relaunch negotiations and we believe that these actions make it more difficult for our efforts to succeed. So we object to this and we object to other Israeli practices in Jerusalem related to housing, including the continuing pattern of evictions and demolitions of Palestinian homes," Kelly said.
About 180,000 Israelis live in Jewish settlements built around east Jerusalem.
Israel insists east Jerusalem is part of Israel and rejects efforts to restrict building there.
Palestinians want east Jerusalem to be the capital of a future state they hope to establish in the West Bank and Gaza Strip.
U.S. policy says the status of Jerusalem must be resolved through negotiations between the Israelis and Palestinians.