Israel has approved plans for more than 550 new homes in three settlement neighbourhoods of occupied East Jerusalem.
The Jerusalem municipality said its planning committee had granted permits to build 386 units in Har Homa, 136 units in Neve Yaakov and 36 units in Pisgat Zeev; built on land taken by Israel in 1967.
Israel captured East Jerusalem and other territory during the 1967 conflict and later annexed it in a move never recognised by the international community.
Israel is engaging in the deliberate provocation of the Palestinians to drive them to leave the negotiations
Issuing permits is one of the last stages before construction begins, with building likely to start in the coming weeks, Israel's Peace Now settlement watchdog said.
"We are talking about building permits, which is really the final stage," spokesman Lior Amihai told the AFP news agency.
"It's a shameful decision, at a shameful time. A government that wants a two-state solution would not issue those amount of permits for East Jerusalem neighbourhoods."
According to figures from Peace Now, in the six months since peace talks between Israel and Palestinians began on July 29, the government of Prime Minister Benjamin Netanyahu advanced plans for 7,302 new homes, including 4,880 in the West Bank and 2,422 in East Jerusalem.
Figures for the whole of 2013 show that 2,433 new East Jerusalem homes were pushed through various stages of the lengthy planning process, indicating that almost all of them were advanced after the talks started.
Israel and the Palestinians resumed direct peace negotiations at the end of July with the aim of reaching an agreement within nine months.
But the US-led talks have been overshadowed by Israel's refusal to rein in construction plans on land the Palestinians want for a future state.
Senior Palestinian official Hanan Ashrawi condemned Israeli building policy in East Jerusalem.
"Israel is engaging in the deliberate provocation of the Palestinians to drive them to leave the negotiations in protest of Israeli violations, and therefore should be blamed for the destruction of the peace process," she said in a statement.
The Palestinians want East Jerusalem for the capital of their future state. They, along with the international community, consider settlement construction there as well as in the occupied West Bank a violation of international law.