Prime Minister Benjamin Netanyahu has authorized construction of hundreds of new homes in Jewish settlements in the West Bank and east Jerusalem, an Israeli official confirmed Tuesday.
The government has presented the move as a response to a series of deadly Palestinian attacks against Jewish settlers. The Palestinians have long viewed settlement construction as the biggest obstacle to the stalled peace process.
The official said construction would include 560 new homes in Maale Adumim, just outside Jerusalem, as well as construction in the Jerusalem neighbourhoods of Ramot, Gilo and Har Homa. The plan also called for over 600 new homes in an Arab neighbourhood of east Jerusalem.
He spoke on condition of anonymity because he was not authorized to discuss the matter with reporters.
Israel captured the West Bank and east Jerusalem in the 1967 war. Most of the world opposes settlement construction in these areas, where the Palestinians hope to establish an independent state.
U.N. Secretary-General Ban Ki-moon said the Israeli plans raise "legitimate questions" about the country's long-term intentions. Palestinian official Hanan Ashrawi said Israel is "bent on destroying the viability, integrity and territorial contiguity of a future Palestinian state."
Also Tuesday, Israel's Shin Bet security service said it has arrested two Palestinians from the Gaza Strip who allegedly smuggled money for the Hamas militant group.
It said the men held special permits allowing them to conduct business in Israel. It said they were caught with thousands of euros hidden in their shoes destined for Hamas members in the West Bank.
Israel and Egypt imposed a blockade on Gaza in 2007 after Hamas ousted forces loyal to Palestinian President Mahmoud Abbas. The Palestinian leader now governs in the West Bank, while Hamas remains in control of Gaza.
Israel said the two businessmen revealed information about Hamas tunnels located under homes and mosques in Gaza. It also said they provided information about Hamas rocket launchers hidden in civilian areas.