Netanyahu said that the new construction project serves the ongoing expansion of Ma'ale Adumim settlement as part of the so-called "E1" plan.
E1 plan aims at creating a physical link between Ma'ale Adumim and Jerusalem, and that would effectively complete a crescent of zionist settlements around East Jerusalem dividing it from the rest of the West Bank and its Palestinian population centers.
Palestinians describe the E1 plan as an effort to Judaize Jerusalem and kill chances for a two-state solution.
ILKHA