The municipal planning committee authorised construction of 92 flats in East Talpiot in the southern part of Jerusalem and 32 in Pisgat Zeev to the north. Israel calls both areas Jewish "neighbourhoods" built on land it annexed following a 1967 war.
City officials were not immediately available to comment on details of the plan.
The move came a day after an announcement that the same committee could approve another plan to build 1,400 new homes for Jews on Israeli-annexed land in the West Bank as early as next week, a city council member said.
Palestinians want East Jerusalem, which Israel captured along with the West Bank in 1967, as the capital of the state they intend to establish. Israel considers all of Jerusalem its capital, a claim that is not recognised internationally.
U.S. Secretary of State Hillary Clinton last week denounced the demolition of a derelict hotel in mostly Arab East Jerusalem to make way for 20 homes for Jews in a settlement project.
Prime Minister Benjamin Netanyahu responded publicly by saying Jews had a right to live anywhere in Jerusalem.
About 500,000 Israelis live in the West Bank and East Jerusalem among 2.7 million Palestinians.
The World Court has said settlements Israel has built in occupied territory are illegal. Palestinians say the enclaves could deny them a viable state.
Source: Reuters.com
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