AFP - Jerusalem authorities plan to give the green light to build a new synagogue and school in east Jerusalem on land seized from Palestinians, Israeli army radio reported on Tuesday.

The land was seized from its Palestinian owners shortly before planning for the buildings started in the 1990s, the radio said.

The construction project in the Gilo neighbourhood, a Jewish settlement, still needs final approval from the city's planning commission, whose head Kobi Khalon said this would be a formality.

But Khalon, who is also deputy mayor, added: "We must act with prudence and responsibility as Jerusalem is an explosive city."

The status of Jerusalem and Jewish settlements are major stumbling blocks in Middle East peace efforts.

Israel has considered the Holy City its "eternal and indivisible" capital since it seized Arab east Jerusalem in the 1967 Six-Day War and later annexed it in a move not recognised by the international community.

The Palestinians see east Jerusalem as part of the occupied West Bank and want it to be the capital of their promised state.

The announcement of a plan for 1,600 new settler homes in east Jerusalem during a visit by US Vice President Joe Biden last month triggered a major row with Washington, which has pushed for a freeze of settlement activity.

Israel's seven-strong security cabinet met on Monday to discuss Washington's demands for specific confidence-building measures to promote a restart of Middle East peace talks.

The demands were made last month during Prime Minister Benjamin Netanyahu's visit to Washington that appeared to deepen the row with the administration of President Barack Obama.

Under Netanyahu's orders, Jerusalem's planning commission -- whose approval is needed for any construction project in the city -- has not met since the ill-timed announcement during Biden's visit, said city council member Meir Margalit.

Its first meeting for more than a month will be on Thursday, when it is expected to approve the Gilo project, said the leftwinger.