The Palestinians demanded Thursday that Washington take "serious steps" against Israeli settlement building, after the Jewish state announced plans to build 1,500 new settler homes.
"It is time for the American administration to take serious steps against what the government of Israel is doing," Nimr Hammad, an adviser to president Mahmoud Abbas, told AFP.
Israeli Housing Minister Uri Ariel has invited bids for 1,500 new homes in Jewish settlements in retaliation for a new Palestinian government backed by Hamas, his office said earlier Thursday.
Of the new homes, 400 will be in Israeli-annexed east Jerusalem with the rest elsewhere in the occupied West Bank, the ministry said.
"We strongly condemn this decision which affirms that Prime Minister Benjamin Netanyahu is a liar and is not interested in the two-state solution," Hammad said.
Abbas spokesman Nabil Abu Rudeina warned the Palestinians would "respond in an unprecedented way to this step," but did not elaborate.
"These tenders come at the same time as the world announces is support for the Palestinian unity government. Israel should realise that its settlement policy is unacceptable," Abu Rudeina said.
Abbas swore in a new merged administration for the West Bank and Gaza with the support of Israel's Islamist foe Hamas.
Israel is boycotting what it calls a "terror government" but both the European Union and the United States have said they will work with it.
Washington has said that persistent settlement expansion by Israel was a major factor in the collapse of US-brokered peace talks earlier this year.