The new housing units will be in the Pisgat Zeev and Ramot areas, Ynet reports. They are among 3,500 housing units to be built across Israel and are the first settlement construction plans to be announced since the end of temporary restrictions on 26 September.
“We condemn this act and hold the Israel government responsible for the derailment of the direct negotiations,” Palestinian negotiator Saeb Erakat told the Bloomberg wire service.
“We call on the US and international community to condemn this act, and hold the Israeli government responsible for undermining the direct negotiations. Once again Netanyahu proves he favours settlements over peace.”
Israeli pacifist group Peace Now said that the announcement showed that the government wants to undermine chances of salvaging peace talks, which restarted on 26 September but have been close to collapse over the settlement question.
The temporary ban did not cover east Jerusalem but Netanyahu had avoided endorsing building there for political reasons, Ynet said.
The housing ministry has not publicly confirmed that the project will go ahead. But senior government ministers told the Yediot Aharanot newspaper that Netanyahu had kept Washington informed and delayed the announcement at its request.
Peace Now officials have speculated that the announcement may be a concession to the settler lobby ahead of a possible freeze of settlements on the West Bank.
Israel seized east Jerusalem in the 1967 Six Day War and annexed it shortly afterwards. The UN has never recognised the area as Israeli, nor have the Palestinians, who want it to be the capital of a future state.