Israel approved Sunday a five-year plan to the tune of NIS 85 million ($23 million) to renovate near the Western Wall and the adjacent Jewish quarter in the Old City of Jerusalem.

"The aim of the plan is to improve access for millions of visitors to the site and also to the archaeological sites, and to upgrade the physical infrastructure and the transport infrastructure on the area," Prime Minister Benjamin Netanyahu's office said in a statement.

"The Western Wall is the most important heritage side for the people of Israel, and we are committed to develop it and preserve it so it will continue being a focal point for visitors and an inspiration for millions of visitors, tourists, both old and young, from Israel and abroad."

The Western Wall is considered the most revered prayer site for Jews and is located in a hotly contentious area of the city.

Government spokesman Mark Regev said the budget would be for maintenance work only and does not cover areas that house disputed shrines holy to both Jews and Muslims.

The Western Wall brings millions of tourists each year, Regev said.

"This money is for upkeep and preservation and in no way does this change the status quo," he said.

Palestinian Authority spokesman Ghassan Khatib condemned the Israeli renovation plan, saying it was bad for the peace process.

"Any Israeli activities in the occupied part of Jerusalem are illegal," Khatib said.

"It's not healthy as far as the peace process is concerned because peace would require the end of the occupation of East Jerusalem," he said.