Half a million Jews live in settlement blocs and smaller outposts built in the West Bank and occupied East Jerusalem, territories Israel captured in the 1967 Middle East war.
The World Court has ruled all the settlements illegal and Barack Obama, the US president, has pressed Israel to halt all settlement activities as part of a bid to revive peace talks under which the Palestinians would gain independence alongside the Jewish state.
Binyamin Netanyahu, the Israeli prime minister, has refused to declare a settlement freeze, which could spark a backlash within his rightist coalition government, many of whose members see the West Bank as a Jewish biblical birthright.
Successive Israeli governments have vowed to keep settlement blocs under any peace deal.
"The settlement expansion is a continuation of the Israeli policy that destroys the efforts being exerted, especially by President Obama," Nabil Abu Rdainah, a spokesman for Mahmoud Abbas, the Palestinian president, said.