Local officials have given final approval to build 20 apartments for Jewish settlers where a Palestinian hotel once stood in occupied east Jerusalem, Israeli media reported Tuesday. The reports came as Prime Minister Benjamin Netanyahu held talks at the White House with President Barack Obama as the two sides sought to defuse a two-week row over previous settlement building plans also in the disputed territory. Officials approved the project by US millionaire Irving Moskowitz to build luxury apartments at the site of the former Hotel Shepherd in east Jerusalem's Sheikh Jarrah quarter, Israeli public radio and the Ynet news website reported. Israeli public radio said the Jerusalem authorities had given preliminary approval to Moskowitz's project last July, and last week gave the final go ahead to tear down the Hotel Shepherd and begin construction of the apartments. The Peace Now anti-settlement movement denounced the approval of the 20 new apartments. 'The Jerusalem authorities are leading an independent policy which has disastrous consequences on the chances of reaching an agreement with the Palestinians,' said Hagit Ofran, one of the group's directors. Netanyahu was unable to control the actions of the city council, she added. But a Jerusalem city spokesman decried as 'provocations' attempts to use the announcement to damage Netanyahu's visit to the United States. 'Once the construction permits have been paid for they are automatically issued,' the spokesman said on public radio. Netanyahu has shown no signs of caving in to US demands to halt the construction of new settler homes in east Jerusalem. Relations between the two close allies are in the midst of their worst crisis in years, sparked by Israel's announcement on March 9 of plans to build 1,600 new settler homes elsewhere in east Jerusalem just as US Vice President Joe Biden visited the country. 