The government of Ariel Sharon has again been accused of trying to pre-empt any future peace negotiations by strengthening Israel's hold over territory it occupied during the 1967 Middle East war.
Already condemned by the United Nations for building a controversial barrier through the West Bank which cuts into Palestinian land, Israel now faces more international criticism over its plan to expand settlements in the Golan Heights, captured from Syria in 1967.
The Israeli Government announced the plan after Syria's President Bashar al-Assad offered to re-open negotiations.
Control of the Golan lies between Israel, Syria and a peace deal
Syria wants the Golan Heights returned as part of any peace settlement but the government of Ariel Sharon appears determined to hold on to the territory.
"This is an Israeli decision that the Golan Heights is an integral part of the state of Israel and we don't have any intention of giving up our hold," said Agriculture Minister Yisrael Katz.
The territory is strategically important because it overlooks north-eastern Israel.
Before the 1967 war, Israel was repeatedly shelled from the Golan, according to Israeli security officials.
It is also a key area because it contains water sources and fertile land - both of which are vital in an arid region.
Syria is furious at the Israeli government's plan.
"Every time Syria speaks about peace, wants to establish a just and comprehensive peace in the region, all that Sharon can do is to kill more people and to build more settlements," said a Syrian government minister, Dr Bouthaina Shabban.
"That's the only thing he knows how to do."
But Mr Sharon's spokesman, Ranaan Gissin, said the settlement expansion had been planned long before Syria offered talks.
"What we're talking about is a plan for the development of the rural sector in Israel, part of which has to do with a development plan for housing and tourism and industry on the Golan Heights," Mr Gissin said.
But Mr Sharon's political opponents on the Israeli left have also accused him of seeking to pre-empt any negotiated settlement with Syria.
"If you don't want negotiations, just say that you don't," said Labour member of parliament Haim Ramon.
'Technically at war'
Mr Sharon's Labour predecessor, former prime minister Ehud Barak, came close to agreeing to return most of the Golan Heights to Syria in 2000.
Syria says Israel's plan would kill any chance of peace
But that deal fell apart and Mr Sharon's advisors now say Syria's new offer of talks is a ploy intended to lessen American pressure on Damascus to stop supporting Palestinian militants.
Syria is still technically at war with Israel and is also facing the threat of American sanctions unless it takes action against militant groups allegedly operating from its territory. Syria denies the accusation.
The UN, the United States and a number of other countries have urged Israel to halt the construction of the barrier in the occupied West Bank.
They fear that the barrier could pre-empt any negotiated peace deal with the Palestinians by establishing a de-facto border with would place several Israeli settlements in the West Bank on Israel's side of the barrier.
France has now expressed similar concerns about the decision to expand settlements in the Golan Heights. It has urged Israel to drop the plan in the interests of peace.
The move may also irritate the United States. Washington is struggling to salvage the international peace initiative known as the road map, which aims to establish an independent Palestinian state in the occupied territories.
The road map calls for a freeze on settlement expansion and the Geneva Conventions say that there should not be any transfer of population into occupied territories.
But according to Israeli Interior Ministry statistics released this week, the population of Jewish settlements in the West Bank and the Gaza Strip has grown by about 16% during Mr Sharon's nearly three years in power.
For decades Mr Sharon has been seen as one of the settlers' strongest defenders.
But sources close to the prime minister say the expansion of the settlements since he became prime minister is because of "natural growth" - not because new settlements have been built.