Prime Minister Binyamin Netanyahu is set to approve hundreds of West Bank housing units ahead of a possible construction freeze, according to Israeli officials.
Mr Netanyahu is expected to support the building of new units, in addition to the 2,500 that are yet to be completed. The new buildings will be based in the West Bank, rather than East Jerusalem.
The US has been pressuring the Israeli government to halt all new settlement construction.
Mr Netanyahu is considering temporarily freezing all construction after the new buildings have been completed. Israel will reportedly only cease construction in exchange for Arab states normalising relations.
The time of the freeze is under debate with Mr Netanyahu unwilling to stop construction for more than six months, while the US is eager to implement a freeze of at least nine months.
Palestinian negotiator Saeb Erekat expressed his outrage at Mr Netanyahu’s plan.
“This is absolutely unacceptable,” he told AFP. “The only thing suspended by this announcement will be the peace process.”
Mr Erekat said Israel had responded to US calls for a freeze “with total defiance”. “The real Israeli official answer is being conducted on the ground by continuing the building of housing units and settlements,” he said.