It did not stop them trying to "liberate " it b continually firing at Israeli civillian, repeat Israeli civillians ie non combattants. If they wanted to expand it would make much more sense to build first and continue to protect the civillians of Gilo from snipers meanwhile. Hope this been of help to you.
Italian FM arrives in Iran to promote economic, political ties (Reuters)
from the article: IDF razes wall dividing Jewish and Arab areas east of Jerusalem