Israel's construction ministry intends to build 307 houses in Jabal Abu Ghneim in East Jerusalem. Mark Regev, a spokesman for the Israeli premier, has been quoted as saying that Israel never pledged to limit its sovereignty in the city.
"Plans to continue settlement activities on occupied Palestinian territories, which include East Jerusalem, is provoking serious concerns in Moscow," the Russian ministry said in a statement.
Israel's plans have drawn severe criticism from the Palestinians.
The Russian ministry said these plans "risk bringing to naught all the positive shifts in the regions."
"It is particularly worrying that the Israeli authorities' decision is being adopted at a time when the Palestinians and Israelis are preparing to resume substantive negotiations on key bilateral issues," the ministry said.
Israeli and Palestinian officials will meet Wednesday for renewed peace negotiations. Two weeks ago, international negotiators gathered for a U.S.-sponsored Mideast peace forum in Annapolis, Maryland.
At the Annapolis conference, Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas agreed to resume negotiations towards creating a Palestinian state that have been stalled for seven years.
Moscow also expressed the hope that Israel would reconsider its construction plans in East Jerusalem. The Palestinians have said they were resolved to demand that Israel freeze its construction program.
The parties first developed a staged conflict resolution plan, also known as a road map, in 2002. The plan, which paves the way to the eventual establishment of an independent Palestinian state, stipulates that Israel freeze all settlement construction activity and remove unauthorized outposts built since 2001.