JERUSALEM (AFP) - Israeli authorities have approved a plan to build 40,000 new homes in Jerusalem, including in the annexed Arab eastern sector of the city, over the next decade, the municipality said on Monday. The plan was approved by the National Planning and Building Committee on Sunday, municipal officials said. Municipality spokesman Yossi Gottesman declined to say how many of the housing units would be build in east Jerusalem, which Israel seized in the 1967 Middle East war and whose annexation is not recognised by the international community. Gottesman said the city does not differentiate between the two sides of the city. The building committee last week authorised construction of 1,300 new homes for Jewish settlers in east Jerusalem, infuriating Palestinians and drawing criticism from visiting US Secretary of State Condoleezza Rice. A total of 245,000 Palestinians live in east Jerusalem alongside more than 200,000 Jewish settlers. Continued Israeli settlement construction in the occupied West Bank and east Jerusalem is seen as a major hurdle in peace efforts.