The United States and Israel have already signaled their disapproval of the Palestinian initiative. A State Department spokesman, Ian C. Kelly, said Monday that the United States supported “a Palestinian state that arises as a result of a process between the two parties.”  Israel’s prime minister, Benjamin Netanyahu, has warned that a unilateral move by the Palestinians would “unravel” existing agreements and could lead Israel to respond with unilateral steps.  But the Palestinian president, Mahmoud Abbas, told reporters in Cairo on Tuesday that the proposal had the backing of Arab countries and that the deadlock in the peace process left the Palestinian leadership with no option but to try a different course.  “We feel we are in a very difficult situation,” Mr. Abbas said. “What is the solution for us? To remain suspended like this, not in peace? That is why I took this step.” Aides have said that Mr. Abbas, who said recently that he did not wish to run again for the Palestinian leadership, is dispirited by the lack of movement in the peace process.  Disagreements over settlement building are in large part the reason that the negotiations, which have been stalled for months, have not resumed. The Palestinians demand a complete freeze on settlement construction in the West Bank and the parts of Jerusalem taken over by Israel in 1967; the Israelis have rejected that.  Israel says it is willing to hold off new settlement projects for several months, but insists on allowing the completion of about 3,000 housing units already in various stages of planning and construction in the West Bank. It refuses to include Jerusalem in any freeze.  The 900 housing units that Israel said on Tuesday had moved closer toward approval are in addition to those homes. They are in Gilo, an area in southern Jerusalem considered by Israel to be a neighborhood of the city and by the Palestinians and much of the world to be a settlement that violates international law. Israel claims sovereignty over all of Jerusalem.  Saeb Erekat, the chief Palestinian negotiator, said the Palestinian Authority “strongly condemns” the decision to advance the construction in Gilo. The United Nations secretary general, Ban Ki-moon, said he “deplores” the decision.  Neil MacFarquhar contributed reporting from the United Nations, and Peter Baker from Washington.  A version of this article appears in print on November 18, 2009, on Page A6 of the New York edition with the headline: Israel Moves Ahead on Plans to Expand Settlement in Disputed Part of Jerusalem. Order Reprints| Today's Paper|Subscribe
Israel said it had advanced plans to expand a district of Jerusalem that Palestinians also claim, a move likely to complicate the White House’s efforts at peace talks.