An ultra-Orthodox Jewish man walks in Ramat Shlomo, a Jewish settlement in an area of the West Bank annexed to Jerusalem by Israel. Israel's interior minister signed off Thursday on a plan to build 1,600 settler homes there. (Ronen Zvulun/Reuters)

Israel’s interior minister has given final approval for a plan to build 1,600 homes in a Jewish neighborhood in East Jerusalem, his spokesman said Thursday, a project whose announcement last year during a visit by Vice President Biden caused a diplomatic rift with Washington.

Interior Minister Eli Yishai of the ultra-Orthodox Shas party also intends to approve the construction of 2,700 homes in two other Jewish neighborhoods in East Jerusalem in the coming days, said the spokesman, Roei Lachmanovich. He said the moves were part of a broader response by Yishai to recent protests in Israel against rising rents and housing prices and had been coordinated with the office of Prime Minister Benjamin Netanyahu.

“There is a need to build in Jerusalem, and this is almost the only option available,” Lachmanovich said of the areas where construction is planned. The 1,600 homes are to be built in Ramat Shlomo, a development for ultra-Orthodox Jews. An additional 2,000 are planned for an area known as Givat HaMatos, and 700 more for Pisgat Zeev. All three neighborhoods are on West Bank land annexed to Jerusalem by Israel after it captured the territory in 1967.

The initial approval of plans to build in Ramat Shlomo was announced in March 2010 as Biden was visiting Jerusalem. He condemned the plan, and Secretary of State Hillary Rodham Clinton called the announcement during the vice presidential visit “an insult to the United States.”

Thursday’s confirmation that building would proceed, on land Palestinians seek for a future state, was criticized by the State Department and denounced by the Palestinian Authority.

“Unilateral action of this kind works against our efforts to get folks back to the table, makes it all more difficult,” State Department spokeswoman Victoria Nuland said in Washington. “We think the best path forward is direct negotiations, so that the parties can agree together on an outcome that realizes the aspirations of both parties for Jerusalem.”

On Tuesday, the State Department also rebuked Israel for promoting separate plans to build 930 apartments in Har Homa, another Jewish neighborhood in East Jerusalem.

Hagit Ofran, a leader of Peace Now, an Israeli group that opposes the settlements and monitors their expansion, accused the government of “exploiting the housing crisis in Israel to promote its settlement policy,” which she said was meant to undermine prospects for a Palestinian state.

Israeli-Palestinian negotiations that were relaunched last September broke off three weeks later in a dispute over continued Israeli settlement building. The Palestinians say they cannot resume talks as long as Israel continues to build on land whose future is supposed to be decided in negotiations. Netanyahu has urged an immediate resumption of talks to resolve all outstanding issues, including the future of the settlements.

The chief Palestinian negotiator, Saeb Erekat, said the latest Israeli steps were “further proof that this government is committed to investing in occupation rather than peace,” and he called for international support for a planned Palestinian bid for recognition of statehood at the United Nations next month.

“Recognizing the State of Palestine on the 1967 border and supporting our admission to the UN is the appropriate response to Israel’s rejectionist and expansionist agenda,” Erekat said in a statement.

Staff writer Mary Beth Sheridan in Washington contributed to this report.