Israel has announced plans to build 22 more homes in a Jewish settlement in the West Bank.
Maale Adumim, east of Jerusalem, is already home to 35,000 settlers
This comes a week after US President George W Bush called on Israel to stop all settlement expansion in line with commitments made under the roadmap.
Palestinian negotiator Saeb Erekat said the plan, announced on Thursday, undermined efforts to revive talks.
He urged the international community to try to stop the building at the Maale Adumim settlement, east of Jerusalem.
Israeli Prime Minister Ariel Sharon is pushing ahead with plans to withdraw from the Gaza Strip but has said Israel will hold on to parts of the West Bank, including the Maale Adumim settlement and another at Ariel, to the north of Jerusalem.
In April, Israel unveiled plans for 3,500 extra homes on occupied land near Maale Adumim - the largest Israeli settlement in the West Bank - forming a corridor to Jerusalem.
Israel has occupied the West Bank and Gaza since 1967.
The international community considers all settlements in Gaza and the West Bank, including East Jerusalem, as illegal under international law, though Israel disputes this.