Israel gave green light on Tuesday to a plan to build some 900 new housing units in the Jerusalem neighborhood of Gilo, located beyond the Green Line.

There is international outrage at the Israeli plan to construct900 homes in East Jerusalem the international community deems as occupied territory, and analysts say the move further overshadows the prospect of reviving Israeli-Palestinian peace talks.

Jewish neighborhoods in East Jerusalem, captured by Israel in 1967 and later annexed, are considered by international community as Israeli settlements and one of the main obstacles to Israeli-Palestinian peace process.

Israeli Prime Minister Benjamin Netanyahu insists that his government will not halt construction in Jerusalem, while the Palestinians want the eastern section of the holy city as capital of their future state.

The case for Gilo

Gilo lies on the southern edge of Jerusalem, just across a wide gorge from the outskirts of Bethlehem, a Palestinian town in the West Bank.

It is a suburb of Jerusalem like any others -- dominated by low-rise apartment buildings clad in the local creamy-white Jerusalem stone. Its residents are a typical mix of native Israelis and immigrants from around the world.

Unlike many of the Jewish settlers in the West Bank, the vast majority of people who live in Gilo chose to move there not for ideological reasons but because they saw it as an integral part of the city.

Israeli Jews do not see Gilo as occupied territory. As a result, they do not oppose the construction of additional homes in an area that they say in no way impinges on the lives of the Arabs who live close to the neighborhood.

The municipality says Israel is being singled out.

"I do not presume that any government would demand a freeze of construction in the United States based on race, religion or gender and the attempt to demand it from Jerusalem is a double standard and inconceivable," Jerusalem's Mayor Nir Barkat said in a statement.

He insists that all Jerusalem residents have the right to build wherever they want in the city, as long as appropriate planning permission is granted.

Yet while most Jewish Israelis say they regard all of Jerusalem as their capital and some agree that Israel should not be building in the Arab-dominated, occupied parts of the city, there is virtual wall-to-wall agreement among them that this latest building plan should be allowed to go ahead.