The European Union on Saturday added to United States and Palestinian criticism over Israeli plans to build 900 homes in east Jerusalem, Yedioth Ahronoth reported.

"Israel's determination to continue its settlement policy despite the urging of the international community not only threatens the viability of the two state solution but also seriously calls into question its commitment to a negotiated agreement with the Palestinians," the EU said in a statement.

Settlement watchdog Peace Now reported the latest batch of construction approvals on Thursday, just hours after Israeli Prime Minister Benjamin Netanyahu formed a new rightwing-religious coalition government.

The new homes will be built in the east Jerusalem settlement neighborhood of Ramat Shlomo following a decision late Wednesday by the city's district planning committee.