The European Union (EU) expressed its dismay on Wednesday for Israel's decision on the expansion of the settlement of Gilo in East Jerusalem, Xinhua reported.

    "The presidency recalls that settlement activities, house demolitions and evictions in East Jerusalem are illegal under international law," Sweden, which is current rotating presidency of the EU, said a statement.

    Such activities also prejudge the outcome of final status negotiations and threaten the viability of a two-state solution. The presidency recalls that the European Union has never recognized the annexation of East Jerusalem in 1967 nor the subsequent 1980 basic law," said the statement.

    "Actions taken by the Israeli government contravene repeated calls by the international community, including the Quartet, and run counter to the creation of an atmosphere conducive to achieving a viable and credible solution to the conflict between Israelis and Palestinians," the statement added.

    The Jerusalem municipal planning committee approved early on Tuesday the "Gilo's western slopes" construction plan, under which900 housing units will be built in the form of 4-5 bedroom apartments, in an effort to lure more Israelis to reside.

    Gilo, with a population of 40,000, is included within Jerusalem municipal boundaries by the Israeli government. Israel claims that Gilo is one of Jerusalem's neighborhoods, while the United Nations and the Palestinians say that Gilo is an Jewish settlement in East Jerusalem.