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Israeli Prime Minister Benjamin Netanyahu has told senior ministers he is lifting restrictions on settlement building in East Jerusalem, Reuters reports referring to a statement on Sunday, immediately after the city's municipal government approved permits for the building of hundreds of new homes in the area.

"There is no longer a need to coordinate construction in the Jewish neighborhoods in East Jerusalem. We can build where we want and as much as we want," the source quoted Netanyahu as saying, adding that he also intended to allow the start of building in the West Bank.

"My vision is to enact sovereignty over all the settlements," the statement also said, pointing to Netanyahu's apparent bid to win greater support from settlers and appeal to a right-wing coalition partner.

Netanyahu told the ministers of the move at a meeting where they also decided unanimously to postpone discussing a bill proposing the Israeli annexation of the West Bank settlement of Maale Adumim, home to 40,000 Israelis near Jerusalem.