Israel has approved the building of about 300 new homes for Jewish settlers in the West Bank, the government says.
Settlement construction is trying to meet Israel's "natural growth"
Defence Minister Shaul Mofaz approved construction in Maale Adumim, the largest settlement in the territory occupied by Israel since 1967.
He also approved preparatory steps for the expansion of the smaller settlements of Bracha and Nokdim.
The decision violates the roadmap peace plan, under which Israel agreed to freeze all settlement building.
Israel has nevertheless continued to expand settlements since the road map was approved in June 2003.
It says the construction is to accommodate "natural growth" of settlement populations and the Maale Adumim building is "within the current geographical borders of this settlement".
A defence ministry spokeswoman told the AFP news agency that Mr Mofaz had authorised construction of 200 homes in Maale Adumim "within the current geographical borders of this settlement".
Widely regarded by international community as illegal under international law according to Fourth Geneva Convention (article 49), which prohibits an occupying power transferring citizens from its own territory to occupied territory
Israel argues international conventions relating to occupied land do not apply to West Bank because they were not under the legitimate sovereignty of any state in the first place
But the defence minister had only approved the initial stage of building projects in Bracha and Nokdim, she added.
The US Embassy said Israel should stop the expansion of settlements and remove illegal outposts.
Mr Mofaz made the decision last week while he still was campaigning to become the new leader of the Likud party.
Since then, however, he has left Likud to join Prime Minister Ariel Sharon's new Kadima party.
The defence minister said he was leaving Likud because of what he called right-wing extremists within the party.