Israel's housing and construction ministry said on Sunday it was to publish tenders for the construction of more than 1,000 housing units in east Jerusalem and the West Bank.
According to the ministry's website, the tenders are for 500 new units in the east Jerusalem neighbourhood of Har Homa, and more than 500 in two West Bank settlements -- 348 in Beitar Ilit near Bethlehem, and 180 in Givat Ze'ev northwest of Jerusalem.
The tenders were part of a package of nearly 6,000 housing units which are to be built across Israel and the West Bank, the ministry said in a move which was angrily denounced by the Palestinians.
"The Palestinian Authority strongly condemns the Israeli government's decision to build a thousand new housing units in Jerusalem and the West Bank," said negotiator Saeb Erakat.
"This new colonial decision by the Israeli government which we condemn undermines efforts to establish peace in the region," said presidential spokesman Nabil Abu Rudeina.
Ministry spokesman Ariel Rosenberg told AFP that the new settlement units were being marketed "as a follow-up to the Palestinian (UN membership) bid in September."
The Palestinian attempt to seek full state membership at the United Nations has deeply angered Israel, which says such a state can emerge only through bilateral peace negotiations.
A month later, the Palestinians won full membership at the UN cultural organisation UNESCO, prompting an Israeli government decision on November 1 to increase settlement building in the West Bank and east Jerusalem.
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Since then, Israel has issued announcements for 3,298 new settler homes in the West Bank and east Jerusalem, official figures show, including 2,230 published on November 15, another 40 on December 12 and 1,028 on Sunday.
Of that number, 2,057 will be built in east Jerusalem and 1,241 in the West Bank.
Settlement watchdog Peace Now said the administration of Israeli Prime Minister Benjamin Netanyahu was pursuing the well-worn path of creating facts on the ground in a bid to block any two-state solution to the Israeli-Palestinian conflict.
"Netanyahu's government not only is not promoting peace, but it is doing everything it can to prevent it by setting facts on the ground that will prevent a two-state solution," said Peace Now's Hagit Ofran.
"Generally speaking, since Netanyahu gave his speech to the US Congress (in May), and since there was no official decision against Israel in the UN, he is allowing himself to do whatever he wants to continue preventing the peace process," she told AFP.
Israel's settlement building is one of the most intractable disputes of the conflict between the two peoples, and has frequently floored efforts to broker a peaceful solution.
Direct talks broke down in autumn 2010 after Israel failed to extended a temporary freeze on new West Bank settlement building, with the Palestinians refusing to talk unless they renewed it and implemented a ban on construction in east Jerusalem.
More than 310,000 Israelis live in settlements in the occupied West Bank, and the number is constantly growing.
Another 200,000 live in a dozen settlement neighbourhoods in east Jerusalem, which was captured by Israel in 1967 and annexed in a move never recognised internationally.
The international community considers all settlements in territories occupied by Israel since June 1967 to be illegal, whether or not approved by its government.