Israel is moving forward with plans for more than 1,000 new homes in two West Bank settlements, a watchdog said on Thursday in a move denounced by the Palestinians as an "abortion" of US peace efforts.
Details of the plans emerged as US Secretary of State John Kerry makes an intensive effort to rekindle dormant peace talks, with Israel's settlement building a key sticking point.
The Peace Now settlement watchdog said plans to build 538 new homes in the northern settlement of Itamar and to legalise 137 existing units there were submitted to regional authorities this week for review.
Itamar is a relatively small, isolated settlement southeast of Nablus and surrounded by Palestinian villages. If approved, the plans would enlarge Itamar almost five-fold.
Also submitted for review were plans for 550 homes in Bruchin, of which 52 of them have already been built, said Peace Now's Hagit Ofran.
Bruchin is a former wildcat outpost that was retroactively authorised in April in a decision that brought a statement of "concern" from EU foreign policy chief Catherine Ashton.
Ofran said that while the Itamar expansion had been expected, the scope of the planned building at Bruchin came as a surprise.
"In Bruchin there are about 50 permanent homes and another 50 mobile homes," she told AFP.
"I didn't know that they were going to propose enlarging the settlement tenfold," she said.
The Palestinians lambasted the move as a "serious challenge" and demanded a response from Washington, the European Union and the international community.
"We consider these new decisions over Israeli settlements in the West Bank to be an abortion of the US administration's efforts," snapped Nabil Abu Rudeina, spokesman for Palestinian president Mahmud Abbas.
"This is a serious challenge and abortion of the efforts of Kerry," he told AFP by telephone from Jordan.
"This policy of settlement building will not lead to peace, but to tension and instability in our region and the world," he said.
Palestinian foreign minister Riyad al-Malki made similar remarks in talks with British foreign office minister Alistair Burt on Wednesday.
Signup to our newsletter and follow us on Facebook and Twitter!
"Netanyahu is responding to Kerry's efforts by increasing illegal settlement activities" he said.
"Settlement building is killing the two-state solution."
Kerry was due to visit the region this week but postponed the trip to focus on Syria talks.
US officials insist Kerry remains fully engaged in his efforts and say he plans to reschedule his trip as soon as possible.
But the top US diplomat has warned he is not prepared to make endless futile trips, urging both Israeli Prime Minister Benjamin Netanyahu and Abbas to make the "tough decisions" needed to restart talks frozen since 2010.
Amin Maqbul, a top official in Abbas's Fatah movement, said there was unlikely to be any movement on talks without significant US pressure on Israel.
"We are in no hurry to declare the failure of the American efforts but it seems that as long as the US administration does not want to pressure Israel, the fate of these efforts and Kerry's visits is failure," he told Voice of Palestine radio.
"Now we need to prepare for the period after the failure of these efforts. The Americans will not declare failure; they will send out ambiguous messages and statements, but we need to conclude at some point that these efforts failed and come up with a new strategy."
Abbas has refused to sit down unless Israel halts its settlement construction on land the Palestinians want for a future state.
On Monday, Netanyahu told a parliamentary committee Israel was building in the West Bank and would continue to do so.
He said that keeping hold of the major settlement blocs that house most of the 360,000 Israelis living in the occupied West Bank outside annexed Arab east Jerusalem would not prejudice the outcome of peace talks.
"Settlement in the blocs will not significantly affect the ability to reach an agreement," said Netanyahu who wants to keep such areas under Israeli rule, presumably leaving open the option of withdrawing from less built-up areas.
Since March 2011, when a family of five living in Itamar were stabbed to death by two Palestinians, settler leaders have been pushing for the settlement to be expanded.
Daily Haaretz said no planning permission had ever been granted for the settlement but, in the wake of the killings, the government sought to give it an official seal of approval.