The European Union has added its voice to the cries of condemnation following Israel’s final approval of construction plans in the south-eastern part of Jerusalem.

The plan, which has been in the works since 2012, includes building 2,610 new housing units in the Givat Hamatos neighborhood. It has been publicly criticized by the US, France and Germany, as well.

Givat Hamatos was an empty hilltop when the Israeli government opted to settle Ethiopian and Russian immigrants there in temporary caravans in the early 1990s. The current residents are mostly impoverished families supported by various aid organizations and are still living in the same temporary conditions.

The construction plan, proposed in 2012, included not only residential units, but also a promenade, hotels, cafes, office buildings and commercial space. In later stages, the plan will expand construction to nearby Beit Safafa, an Arab neighborhood, allowing for an additional 800 units to be built there, too, thus expanding that community.

French Foreign Minister Laurent Fabius called the construction the first new settlement in East Jerusalem in 15 years. Israeli Prime Minister Benjamin Netanyahu disagrees. In response to similar criticism from US President Barack Obama, Netanyahu called on his American counterpart to check his facts.

“These are not settlements,” Netanyahu said in an interview. “These are neighborhoods of Jerusalem. We have Arab neighborhoods and we have Jewish neighborhoods.”

In addition to the Givat Hamatos approval, the government agreed to allow Jews to live in the Arab neighborhood of Silwan, adjacent to Jerusalem’s Old City.

The EU expressed its outrage in a statement by its External Action Service. “This represents a further highly detrimental step that undermines prospects for a two-state solution and calls into question Israel’s commitment to a peaceful negotiated settlement with the Palestinians.

“We stress that the future development of relations between the EU and Israel will depend on the latter’s engagement towards a lasting peace based on a two-state solution,” the statement added.

Despite the threatening language of the EU statement, nothing was said regarding specific actions to be taken against Israel. The EU is Israel’s biggest trading partner, and Israel is currently eligible for €14 million ($18 million) in EU funding over the next seven years.