The Jerusalem municipality is due to act on Wednesday, December 28 on requests to construct hundreds of new homes for Israelis in areas that Israel captured in 1967 and annexed to the city, drawing fresh criticism from the United States that settlement activity puts Middle East peace-making at risk, Reuters says.

Israel is still fuming over the resolution approved last Friday by the United Nations Security Council that demands an end to settlement activity in the occupied West Bank and East Jerusalem.

U.S. State Department spokesman Mark Toner said he was aware of press reports about plans for more settlement building.

"We would hope that the U.N. Security Council resolution would serve as a wake-up call, a call to action, an attempt to alert both sides, but certainly Israel, that its actions with regards to settlement activity are a detriment to moving forward with a two-state solution," Toner told a news briefing.

Israel described as "shameful" the decision by the United States to abstain in the vote rather than wield its veto. The Obama administration is a strong opponent of the settlements.

U.S. Secretary of State John Kerry is to make remarks on Wednesday regarding Middle East peace and discuss steps needed to resolve the Israeli-Palestinian conflict.