JERUSALEM (AP) — City officials said Wednesday that they have granted final approval for the construction of a controversial new Israeli housing development in east Jerusalem, dealing a new blow to already tattered relations with the Palestinians and raising the likelihood of a fresh round of international condemnations.

The announcement was circulated by an anti-settlement watchdog group as Israeli Prime Minister Benjamin Netanyahu was meeting President Barack Obama at the White House, though officials said the decision was taken two weeks ago. The U.S. has repeatedly criticized Israeli construction in east Jerusalem.