Israeli authorities on Wednesday approved a major expansion of the east Jerusalem settlement of Nof Zion, signing off on plans to add 176 homes, the citys mayor and his deputy said in a move that drew quick condemnation from the Palestinians. The expansion, approved by the citys planning committee, would create the largest Israeli settlement inside a Palestinian neighborhood of Jerusalem, NGOs say. It will allow Nof Zion to add 176 housing units to the 91 existing homes. The settlement is located in the annexed east Jerusalem Palestinian neighborhood of Jabel Mukaber. Peace Now and other NGOs say the approvals would make Nof Zion the largest Israeli settlement inside any Palestinian neighborhood of east Jerusalem and possibly also of the occupied West Bank. Most settlements, particularly in the West Bank, are located outside of Palestinian residential areas. They are typically far larger than Nof Zion. "We are unifying Jerusalem through actions on the ground," Jerusalem Mayor Nir Barkat said in a statement about the settlements expansion. Wasel Abu Yousif, a member of the Palestine Liberation Organization, called the construction plans in Jabel Mukaber "a challenge to all the calls by the international community" to halt settlement building. Jerusalems status is ultra-sensitive and central to the Israeli-Palestinian conflict. Israel occupied east Jerusalem in the Six-Day War of 1967 and later annexed it in a move never recognized by the international community. It sees the entire city as its indivisible capital, while the Palestinians want the eastern sector as the capital of their future state. Some 500,000 Israelis live in the West Bank and East Jerusalem, areas that are home to more than 2.6 million Palestinians.