Residents of Jerusalem's Kiryat Hayovel neighborhood claimed victory yesterday after a tender for 53 luxury homes was canceled.

Instead, the Jerusalem municipality is expected to submit a plan to construct hundreds of apartments for young people at the site.

Three months ago, the Israel Land Administration announced a tender for 53 detached homes in the West Jerusalem neighborhood. The Kiryat Hayovel community council appealed to the courts, demanding the tender be canceled.

Community organizers said the new complexes would block plans to renovate another nearby residence intended for 600 families.

During a hearing on the matter last week, Jerusalem District Court Judge Nava Ben-Or harshly criticized the ILA, and recommended the tender be postponed. The ILA agreed to put the project off for three months.

Yesterday, though, the Jerusalem municipality announced plans to build hundreds of apartment units at the site. Previously, it had supported the ILA's position and attacked the residents for petitioning the court.

"The Jerusalem municipality is interested in maintaining the youthful dynamic of Kiryat Hayovel and in advancing building projects for young couples instead of luxury villas," Mayor Nir Barkat said yesterday. "This is part of an effort to keep young people in Jerusalem, to enable them access to affordable housing and to stop the negative migration."

The neighborhood residents said the tender would have proceeded as planned if they had not petitioned.

"This whole process happened because the residents turned the planning authorities' attention to [the tender]," said one resident. "Nobody thought to stop this."

Meanwhile, city engineer Shlomo Eshkol said that construction has come to a virtual standstill in some parts of the city, due to the diplomatic row that erupted between Israel and the United States last month. Washington was angered when an Interior Ministry planning board announced the approval of 1,600 residential units in the East Jerusalem neighborhood of Ramat Shlomo during Vice President Joe Biden's visit to the region.

"We in Jerusalem do not know where the geopolitical arguments will lead," Eshkol told the judge. "Planned housing units are being cut back in every direction and there are units that can't be argued over and need to be preserved."