EU foreign affairs chief, Federica Mogherini on Wednesday condemned Israel's plans to build another 500 settlement homes in occupied East Jerusalem, ahead of her first visit to Israel later this week.

"The approval of the construction of 500 new housing units in the East Jerusalem neighbourhood of Ramat Shlomo decided by the Israeli Interior Ministry's District Committee for Planning and Construction in Jerusalem risks to jeopardise the on-going efforts to resume a diplomatic process," Federica Mogherini said.

Israel approved Monday plans for some 500 new settler homes in occupied east Jerusalem, a watchdog said, a week after a government pledge to build the structures drew Palestinian ire.

The Israeli interior ministry gave the go-ahead for the units located in the existing settlement of Ramat Shlomo in volatile east Jerusalem, according to statements from NGO, Peace Now to AFP.

"The…decision on the 500 homes in the Ramat Shlomo settlement come after Prime Minister Benjamin Netanyahu's announcement last week that he would accelerate construction in east Jerusalem," Peace Now spokesperson Hagit Ofran said.

“The international community, starting from the EU, is engaged in providing assistance for the rehabilitation of Gaza and to help parties restart a peace process, but this decision represents yet another highly detrimental step which undermines the prospects for a two-state solution and seriously calls into question Israel's commitment to a peaceful negotiated settlement with the Palestinians,” Federica Mogherini said in a statement

The EU's new foreign policy chief said that "since the pleas by the EU, by its member states and by many other members of the international community on the issue of Israeli settlements have remained unheard, I call on the Israeli authorities to reverse it and put an end to its settlement policy in East Jerusalem and in the West Bank."

Jordan recalled its ambassador to Israel on Wednesday after police clashed with stone-throwing Palestinians inside the flashpoint Al-Aqsa mosque compound in Jerusalem, official media said.

Prime Minister Abdullah Ensur asked the foreign minister to "recall the Jordanian ambassador from Tel Aviv in protest at Israel's escalation on the Al-Aqsa mosque compound," the Petra news agency reported.

Egypt condemned the Israeli government's decision to build 500 new settlement units in occupied East Jerusalem in a move considered to be in defiance of international law and Geneva conventions as well a blow to the efforts made to restore peace talks, said foreign affairs ministry spokesperson, Badr Abdel-Ati.

Abdel-Ati added that Egypt also condemned the Israeli aggression against Al-Aqsa mosque and the continuous storming of the mosque by radical Jewish settlers as well as Israeli officials.

Egypt is also calling on the international community to condemn these decisions and to pressure Israel to put a stop to them.