Israel has moved forward with plans to build more than 1000 new homes for Jewish settlers in occupied territory, leading some Palestinian leaders to question its commitment to peace talks.
The Israeli settlement announcement came hours before a government announcement that the first release of long-term Palestinian prisoners has been approved.
Kerri Worthington reports.
Israel has made a push on settlements since the resumption last month of United States-brokered talks on Palestinian statehood, signalling its intention to continue to build in major enclaves it wants to keep in any future peace deal.
Last Thursday, Israel's military-run Civil Administration in the West Bank gave preliminary approval for the construction of more than 800 new settler homes.
In the latest announcement, the Housing Ministry says it will issue tenders for nearly 1200 more settlements in the West Bank and east Jerusalem.
Israel's Housing Minister Uri Ariel, a member of the ultranationalist Jewish Home party, says that peace talks and settlement building do not contradict each other.
A spokesman for Prime Minister Benjamin Netanyahu, Mark Regev, is equally defiant, telling the BBC that since the new construction was designated for existing blocs, it will change nothing in the peace process.
"The truth is that in every peace plan, even those put on the table by the international community, whether you're talking about the Geneva initiative or the Clinton parameters, all those different international ideas to solve the solution (problem), in all of them the Jewish neighbourhoods of Jerusalem and the large blocs remain part of Israel in final status peace. And I'd ask you once again, if we're building in areas that in any way are going to stay part of Israel why is it such a problem?"
But this Israeli protester at a new construction site says Israel's settlement policy is undermining peace negotiations.
"What I'm doing here is I'm commenting about the Israeli government's intentions. There's a gun in one hand, a settlement in the other, and in the middle it says 'give peace a chance'. Because this is all the Israeli government wants, to give peace a chance with weapons and settlements."
Palestinians have expressed anger at the latest push to expand Jewish settlements, but haven't threatened outright to abandon the peace negotiations due to resume on Wednesday.
Palestinian President Mahmud Abbas met US mediator Martin Indyk in Ramallah on Sunday for talks centring on the resumption of the peace talks.
Palestinian chief negotiator Saeb Erekat, meanwhile, has condemned the settlement expansion, questioning Israel's commitment to the talks.
"When both sides are supposed to rebuild trust, and both sides within six to nine months are supposed to reach a comprehensive peace agreement, ending conflict, ending claims, establishing two states on 1967, with the state of Palestine can live side by side with the state of Israel in peace and security, comes putting a cornerstone in Jabal al Mukaber, in the heart of occupied East Jerusalem, announcing 800 housing units in the settlements in the West Bank. And why? Who does these things are determined to undermine the peace negotiations, are determined to force people like us to leave the negotiating table."
Palestinian MP Hanan Ashrawi has told the BBC Israel is deliberately sending a message to the US and the world that it will press ahead with stealing more land, destroying any hope of a the two-state solution.
"We haven't taken an official position to stop the peace talks. They haven't started yet. Personally -- it's a personal opinion and I don't want to express an official opinion -- but I believe that Israel is rendering the talks absolutely irrelevant because it is creating (facts?) and Israel should be held accountable. An if the US and the international community cannot stop Israel then perhaps the international court of law should."
Most world powers regard all the settlements as illegal and say they deny Palestinians the chance of a state with contiguous borders.
The European Union recently excluded Jewish entities on occupied Palestinian land from financial cooperation accords.
This has angered the Israeli government.
Its chief negotiator, Tzipi Livni has told visiting German Foreign Minister Guido Westerwelle Israel's borders will be determined by talks with Palestinians and not influenced by relations with the European Union.
"Unfortunately the conflict between the Israelis and the Palestinians affects sometimes the relations between Israel and the EU (European Union), and I'm not in favour. And I think that this linkage between Israel, the EU, and the Israeli-Palestinian conflict, is something that we need to avoid. And I think that this is an opportunity to say that the future borders of Israel and the future Palestinian state would be discussed and agreed in the negotiations between Israel and the Palestinians, and not as an EU decision."
Guido Westerwelle has warned the outcome of the restarted direct negotiations between Israel and the Palestinians is important for the region and the world.
"This is a crucial time for your country, it's a crucial time for the whole region, and I think it's also a crucial time for the whole world, which means that everyone in the international community especially in Europe knows their own responsibility to support these direct talks and that's my clear message."
News of the latest occupied territory settlement plans came shortly before the Israeli government approved the release of 26 veteran Palestinian prisoners.
They're the first batch of a total of 104 long-term Palestinian and Israeli Arab prisoners who are to be freed in four stages, depending on progress in the peace talks.
Most of the men were involved in attacks that killed Israelis, and the victims' families are expected to appeal to the High Court of Justice against the impending release.
