Foreign Press Secretary Yasuhisa Kawamura said in a statement on Monday that "the government of Japan deeply deplores" the decision, which "clearly undermines the ongoing efforts by the international community toward realizing a two-state solution."
The new settler homes are to be built in the illegal East Jerusalem settlement neighborhood of Ramat Shlomo following a decision last Wednesday by the city's district planning committee.
In his statement Kawamura said: "Settlement activities are a violation of international law, and Japan has repeatedly called upon Israel to fully freeze settlement activities.
"The Government of Japan strongly calls upon the new Israeli government to refrain from any unilateral act that changes the current status quo and to desist from implementing the above-mentioned plan of construction for the sake of progress in the peace process."
Japan has long been a supporter of the Palestinian position. In a statement issued in January, the Japanese foreign ministry said that Japanese assistance to Palestine amounted to $1.5 billion since 1993.
Japan has sought to work toward peace between Israel and Palestine through economic development, the statement said, particularly via the long-term "Corridor for Peace and Prosperity" initiative aimed at promoting development in Jericho and the Jordan Valley area.
The Jericho Agricultural Industrial Park, which work began on in 2012, is the initiative's flagship project, the statement said, noting that it hoped the industrial complex would "lead to the development of the Palestinian private sector."
In January this year, Japanese Prime Minister Shenzo Abe pledged $100 million to reconstruction in Gaza during a visit to the occupied Palestinian Territories.
At the time, he expressed his "concerns over the stalemate of direct negotiations," and requested that both parties "refrain from taking actions that may escalate confrontation."
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