Israeli Prime Minister Benjamin Netanyahu accused the Palestinians of trying to create an "artificial crisis" in recently revived peace talks over settlement construction, dpa reported.
The Palestinians knew "very well" that Israel did not accept a settlement freeze as a condition when they agreed to revive the talks, he said.
Israel was abiding by the commitments it made before entering the talks, he insisted.
Netanyahu made the remarks Sunday to his Likud faction, but his aides and Israel Radio published them Monday, in response to Palestinian anger over plans to build almost 1,900 new housing units in the occupied West Bank and East Jerusalem.
Israeli authorities published tenders for the projects at the weekend, ahead of the arrival of US Secretary of State John Kerry on Tuesday in Tel Aviv. He will then hold talks in Jerusalem and Bethlehem on Wednesday.
Palestinian officials said they would protest the construction plans to Kerry, who was coming to push for progress in the talks, which were revived in July for the first time in years with the ambitious aim of reaching a peace deal in nine months.
But Israeli officials countered that Israel agreed to release jailed Palestinian militants to facilitate the talks, but never accepted a settlement freeze.
A senior aide to Palestinian President Mahmoud Abbas, Yasser Abed Rabbo, said that three months into the negotiations, no progress had been made.
The Americans, he said, had asked the Palestinians to give the negotiations time, but "so far we have not seen any serious negotiations," he told Voice of Palestine Radio.