JERUSALEM: Israel on Monday gave the green light for developers to go ahead with controversial plans to build 1,500 settler homes in Israeli-annexed east Jerusalem, the interior ministry told AFP.

Spokeswoman Efrat Orbach said that the ministry's planning committee had told the applicants to trim their request to build 1,600 new housing units at Ramat Shlomo to 1,500 and resubmit it “for final approval.”

The plan caused a diplomatic rift with Washington when it was first announced in 2010 as US Vice President Joe Biden met top Israeli officials in Jerusalem to boost Israeli-Palestinian peace talks.

It has lain dormant since August 2011 but two weeks ago the ministry announced that it had been revived.

Orbach said that at a Monday's meeting, the committee heard public objections and told to make changes.

“It reduced the plan from 1,600 to 1,500 and now the plan has to be resubmitted and meet the conditions in order to get final approval,” she said.

“It could take months more or years.”Ramat Shlomo is a Jewish settlement in the mainly Arab eastern sector of Jerusalem which Israel seized in 1967 and later annexed in a move not recognised by the international community.