Jerusalem city council has begun work on a controversial new road linking settlement neighbourhoods in the annexed eastern sector to the centre, the website of the Haaretz daily said on Friday.
It said the new road, route 20, would link the existing ring road with the settlement districts of Neve Yaakov and Pisgat Zeev, and the Arab neighbourhoods of Beit Hanina and Shuafat.
Construction, at a cost of around 30 million euros ($40 million), is expected to last 14 months, Haaretz said.
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Confirming the report, city councillor Pepe Alalu, of the left-wing Meretz party slammed the project as a unilateral Israeli step implemented without consultation with the Palestinians.
"The new road will serve mainly Jewish settlements and it was for this purpose that it is being built," he told AFP.
The Israeli government last month announced tenders for the construction of 800 housing units in east Jerusalem, which it occupied in the 1967 Six Day war and annexed shortly afterwards in a move never recognised by the international community.
Israel considers all of Jerusalem its "eternal and indivisible" capital, while the Palestinians want to make east Jerusalem the capital of the state to which they aspire.