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 .
Israeli bulldozes demolishes part of a hotel in part of East Jerusalem . Plans to demolish the hotel were announced last month by Prime Minister Benjamin Netanyahu's government as it seeks to expand Jewish settlements on occupied land and build more homes for Jews there. Palestinians denounce the action while Israel has defended it .