The Israeli government says it is taking steps to approve four new settler outposts in the Occupied West Bank, in a decision condemned by Palestinian officials.
The announcement was made on Thursday, just days before the US Secretary of State John Kerry is due to meet the Israeli and Palestinian leaders in attempt to revive peace talks.
Israel has been sending mixed signals on its policy as Kerry pursues efforts to revive negotiations that the Palestinians quit in 2010 in anger over Israeli settlement building on occupied land they seek for a state.
The announcement that the settlements would be authorised was made in response to a Supreme Court petition by the Israeli anti-settlement group Peace Now.
"The intention to legalise outposts as new settlements is no less than a slap in the face of Secretary Kerry's new process and is blatant reassurance to settler interests," Peace Now said in a statement.
Nabil Abu Rdainah, a spokesman of Palestinian President Mahmoud Abbas, condemned the move.
"Israel continues to put obstacles and to sabotage US efforts to resume negotiation," he said. "Our position is clear and that is all settlement is illegal and must be stopped."
A spokesman for Prime Minister Binyamin Netanyahu declined to comment on the government's response to the Supreme Court.
In Washington, US State Department spokeswoman Jen Psaki said a decision to give validity to the four outposts would be counterproductive.
"We don't accept the legitimacy of continued Israeli settlement activity," she said.
Israeli settlements in the West Bank, which Israel captured in the 1967 Middle East war, are considered illegal under international law.
Israel disputes this and distinguishes between about 120 government-authorised settlements and dozens of outposts built by settlers without permission.
Last week, Peace Now and Israeli media reports said Netanyahu has been curbing some settlement activity by freezing tenders for new housing projects, in an apparent effort to help efforts to renew peace talks.
Peace Now said at the time construction already under way was continuing, and Israel announced last week that it had given preliminary approval for 300 new homes in Beit El settlement as part of a plan Netanyahu announced a year ago.
Kerry, due to meet Netanyahu and Abbas separately next week, has said he believed "the parties were serious" about finding a way back into talks.
The main issues that have to be resolved include the borders between Israel and a Palestinian state, the future of Israeli settlements, the fate of Palestinian refugees and the status of Jerusalem.