The Israeli government has advanced plans for some 5,700 new homes in the occupied West Bank.
The announcement comes despite US pressure to stop settlement expansion, which it sees as an obstacle to peace with the Palestinians.
A US spokesperson said Washington was "deeply troubled" by the development.
Four Israeli settlers were shot dead by Palestinians last week, prompting days of settler violence.
Violence between Palestinians and Israelis has flared since Israel’s Prime Minister Benjamin Netanyahu was re-elected last year.
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