Jerusalem ( CNN ) -- Israeli bulldozers demolished part of a hotel in East Jerusalem on Sunday , prompting swift condemnation from Palestinians . The building plan , which was given final approval last year , was met with disapproval from the United States at the time which called for the Israeli government to put off any demolition . Israel demolished part of the hotel as part of a plan to build 20 housing units for Jews in a predominantly Palestinian neighborhood of East Jerusalem . The chief Palestinian negotiator , Saeb Erakat , denounced the action . `` The state of Israel is demolishing one Palestinian property after another in an effort to cleanse Jerusalem of its Palestinian inhabitants , heritage and history , '' he said in a statement . He said such actions `` undermine the two-state solution and negotiations process . '' The United States had called on Israel to halt the housing project , but Prime Minister Benjamin Netanyahu responded by saying `` our sovereignty ( over Jerusalem ) can not be challenged '' . The project was given final approval last March . The Shepherd Hotel was built in the 1930s by a prominent Palestinian family and was purchased from the state of Israel in 1985 by American millionaire Irving Moskowitz , an avid supporter of Jewish building in East Jerusalem . Moskowitz developed plans for the 20 housing units that sparked the hotel 's demolition on Sunday .
Palestinians bulldozes demolishes part of a hotel in part of Israel . Plans to demolish the hotel caused a rift between the East Jerusalem and East Jerusalem . Israeli denounce the action while Israel has defended it .