Is Gilo an Israeli settlement in East Jerusalem?

While I am usually opposed to building Jewish settlements in the West Bank, I think that the White House (White House: Israeli housing plans dismaying) is foolish to try to prevent Israel from building more apartments in Gilo - a Jewish neighborhood of Jerusalem that is, in fact, over the Green Line, but which in any realistic plan to make peace with the Palestinians will never be part of a Palestinian state. The Washington Post calls Gilo part of "East Jerusalem," but in fact it is in southern Jerusalem, north of the Palestinian town of Beit Jalla, which is just north of Bethlehem. It would be important to know exactly where these new apartments would be built and whether any Palestinian land would be expropriated for them. I would certainly be opposed to expropriation, but not necessarily to building more Gilo apartments on land that doesn't belong to Palestinians.

Saeb Erakat, the Palestinian negotiator, of course opposes Israeli building in Gilo (which doesn't surprise me, nor do I blame him), on the grounds that this belongs to the part of Jerusalem Palestinians want for their capital. This reason I do find surprising - I've never heard the Palestinians say that Gilo should be part of the Palestinian capital, I've always understand that other neighborhoods in the east and north of the city should be part of the Palestinian capital (the Arab parts of the Old City, the built-up area of east Jerusalem near the Damascus Gate - Sultan Suleiman St., Salah al-Din St., Harun al-Rashid St., Sheikh Jarrah, Ras al-Amud, Abu Dis).

Haaretz reports on the substance of the plan:

The plan - named "Gilo's western slopes" - will account for a significant expansion of the neighborhood. The planned 900 housing unites will be built in the form of 4-5 bedroom apartments, in an effort to lure relatively well-off residents.

The plan was initiated by the Israel Land Administration, and has received an initial green light, but on Tuesday the authorization was finalized.

The additional housing units are only part of the planned expansion of Gilo. In fact, the majority of apartments slated to be built in Jerusalem in the coming years will be located in Gilo. Other building plans in various stages of approval include some 4,000 new housing units in Gilo and adjacent areas.

According to sources in the planning committee, extensive building plans stem from the scrapping of the Safdie plan, which would have seen the city expand westward. The Safdie plan, named after architect Moshe Safdie, included over 20,000 housing units on open areas covering 26,600 dunams (some 6,600 acres) west of the city on natural and planted forests near Ramot. The plan had come under attack by environmental groups, and was later discarded.

According to the sources, this created a need for new land for construction, which can be found in the southern parts of the city and beyond the Green Line.

I'm not sure that this is a battle that the White House should be having with Israel. Israeli building in other parts of Jerusalem appears to me to be much more crucial to oppose (for example, in Sheikh Jarrah or in Silwan), because it breaks up cohesive Palestinian neighborhoods and makes it much more difficult for them to be included in a future Palestinian state. As far as I know, this is not true of Gilo.