JERUSALEM - A Jerusalem planning committee on Wednesday greenlighted plans for building 130 housing units in the city's southern Gilo neighborhood and a cultural center near the Old City, local media reported.

The plans called to build a large tourist and convention center which would contain a parking lot near the extensive City of David archaeological dig, in the Silwan/Shiloach neighborhood outside the southern walls of the Old City, Israel's Army radio said.

The 250-vehicle parking lot would serve visitors to the Western Wall and Temple Mount within the Old City walls, thereby alleviating the traffic along a narrow road surrounding that section of the Old City.

The backers, an Israeli right-wing nonprofit organization, Elad, which supports the Jewish population of the area, runs the dig, which Israel has slated as a national park.

Left-wing NGO Peace Now and local Palestinian residents condemned the plan, charging that it was meant to provide solutions for "settlers" but not for Silwan's residents, according to the Ha'aretz daily.

"They do not examine what our needs are," one resident said.

"We have a shortage of playfields for children (and) a clubhouse. None of this interests them. We are not willing to pay with our lives for the projects of a nonprofit with an objective of settlement," he added.

Successive Israeli governments have emphasized that they consider Jerusalem to be Israel's "sacred and eternal capital" and would allow construction in all parts of the city, including digs like City of David, which is seen as a proof of the ancient Jewish connection to the area.

Wednesday's decision by the Jerusalem District Planning and Construction Committee came on the heels of a similar decision on December 18, in which the Israel Lands Administration and the Housing and Construction Ministry announced tenders for nearly 1,000 apartments in contested areas in Jerusalem and the West Bank.

That plan would allocate 500 apartments to the city's Har Homa neighborhood, 348 to Beitar Elite in the south of the city, and 180 to Givat Ze'ev in the north. All the three areas lie beyond the 1967 war's cease-fire lines.

"Some countries won't be pleased with this (announcement), but they won't be surprised," said Housing and Construction Minister Ariel Atias, according to the Ynet news site.

The United Nations Security Council and some European Union member states said in a statement that they were "dismayed by these wholly negative developments" and called on the Israeli government to call the plans off.

The plans, which will provide a total of close to 6,000 apartments to the market in areas throughout the country, are aimed at easing the spiraling housing costs that has sparked several months of nationwide protests.

"The decision was reached last month after the Palestinians were accepted into the UNESCO (United Nations Educational, Scientific, and Cultural Organization), and the right thing to do was to alleviate the shortage of housing units designated for young couples in Israel, with an emphasis on the capital, Jerusalem," Atias said.

U.S. officials criticized Israel's decision at the beginning of November to go ahead with the building plans for some 2,000 units in Gilo, and in major settlements to the south and east of the city.