Israel announced a plan for thousands of new Jewish settlement homes in the occupied West Bank on Wednesday as Washington voiced readiness to back de facto Israeli annexations there.
Prime minister Benjamin Netanyahu, who is trying to clinch a deal to form a coalition government, wants to start cabinet discussions on 1 July about declaring Israeli sovereignty over the settlements and the strategically important Jordan Valley in the West Bank.
Fresh construction for the settlement of Efrat was approved on land that could accommodate "around 7,000 housing units", defence minister Naftali Bennett's office said in a statement.
"The building momentum in the country must not be stopped, even for a second," tweeted Bennett, a religious-nationalist in Netanyahu's current caretaker government.
The settlements are deemed illegal by most world powers and condemned by the Palestinians, who see all the West Bank, which Israel captured in a 1967 war, as theirs for a future state.
The United States has offered to recognise Israeli sovereignty in the West Bank as part of a proposal president Donald Trump unveiled in February, which also envisages talks on founding a Palestinian state in up to 70 per cent of the territory.
"Sovereignty in Judea and Samaria (the West Bank) and the Valley is an Israeli decision. We are ready," the newspaper Israel Hayom quoted US ambassador to Israel David Friedman as saying.
In separate remarks to the Jerusalem Post newspaper, Friedman reiterated a call for Israeli-Palestinian peacemaking:
"The expectation is that the prime minister will agree to negotiate and, if the Palestinians show up, he will negotiate in good faith based on this (Trump) plan."
The Palestinians say the plan is biased against them, and have boycotted Washington's mediation efforts since it recognised Jerusalem as Israel's capital in late 2017.
"The Trump Administration's Annexation plan endorses everything that the illegal Israeli colonial-settlement enterprise is about: A racist narrative, violations of international law and the perpetuation of the denial of Palestinian rights," Palestinian official Saeb Erekat said.
Israel and the United States do not use "annexation" for Israel's planned moves, arguing that the term applies to land taken from a sovereign country, whereas the West Bank was controlled by Jordan but not generally recognised as part of its sovereign territory before the 1967 war.