gilo is situated in south jerusalem, not east jerusalem. that is a big difference, since east jerusalem is the densely populated arab section of the city, while south jerusalem has large jewish neighborhoods. Building in east jerusalem is something of a provocation, but south jerusalem is a whole different demographic situation.
Knesset passes 'Norwegian Law' allowing ministers to resign their seats, remain in cabinet (Haaretz)
from the article: China joins world condemnation of East Jerusalem building plan