"There is no delay, limitation, or suspension of the construction of Jewish neigbhorhoods in East Jerusalem," Housing Minister Zeev Boim said on Israeli radio.
The statement came after reports on Monday that the Housing Ministry had postponed the construction of 750 apartments in East Jerusalem's Pisgat Zeev neighborhood and another 150 apartments in the Har Homa neighborhood, which already has some 2,000 Jewish homes.
Boim said that an earlier order by Prime Minister Ehud Olmert's to halt all construction work that did not meet his approval applied only to the West Bank, however, and did not apply to Jerusalem, including the east of the city.
Initial housing construction in East Jerusalem sparked an international storm in September 1997, and Israel came under pressure by the U.S. to abandon the construction plan. Construction continued, however.
The step drew criticism by the European Union, which joined the U.S. in condemning Israel's actions.
The so-called Road Map settlement plan proposed by international mediators in the Middle East peace process requires Israel to halt the construction of settlements in occupied Palestinian territories.
However, Tel Aviv insists the requirement does not extend to East Jerusalem.
