Israel has given the go-ahead to build nearly 300 homes in the settlement of Beit El near Ramallah, a spokesman said, in a move likely to spark tensions as Washington seeks to rekindle peace talks.
"The Civil Administration has given the green light for 296 housing units at Beit El, but this is only the first stage of a process before actual construction can begin," he said, speaking on behalf of a unit within the defence ministry which administers the West Bank.
He explained that the construction plans were part of a compensatory measure for settlers who were evicted last year from Ulpana, an unauthorised outpost on the outskirts of Beit El which was evacuated following a High Court ruling.
The announcement came just two days after a report said Prime Minister Benjamin Netanyahu had quietly ordered a freeze on tenders for new settler homes in a bid to give a chance to US-led efforts to revive moribund peace talks with the Palestinians.
Hagit Ofran of Israel's Peace Now settlement watchdog denounced the move.
"This initiative proves Netanyahu is deceiving the world," she told AFP.
"On the one hand, he lets us believe that he is putting the brakes on settlement and on the other, he gives the go-ahead for an enormous building project."
Direct peace talks broke down shortly after they were launched in September 2010 because of an intractable dispute over Israel's settlement building, which is widely accepted as a violation of international law.
The Palestinians say they will not return to negotiations unless Israel freezes construction on land they want for a future state.