Israel on Wednesday approved the construction of 695 new housing units in and near the Jewish settlement of Shiloh, in the heart of the West Bank, north-east of Ramallah, a settlement watchdog group said, DPA reported.
Some 121 of them already exist - 93 in an outpost, Shvut Rachel, set up just outside the settlement without government authorization, said the Israeli group Peace Now.
They were retroactively "legalized" by the Israeli authorities, in a deal negotiated with settler leaders.
The remaining 574 units OK'd by a West Bank planning council are yet to be built and need further approval.
The United Nations special coordinator for the Middle East peace process, Robert Serry, issued a statement condemning the blueprint.
"Today's announcement by Israel to approve a large number of new units deep inside the occupied Palestinian territory in the settlement of Shilo and retroactively legitimize (several) in a nearby outpost is deplorable and moves us further away from the goal of a two-state solution," he said.
Peace Now condemned the move a "victory for law breakers."
"They legalized the illegal and on top of that they gave them a bonus of more construction," a spokesman, Lior Amihai, told dpa.
Under international law, all settlements built on occupied land are illegal, but Israeli law regards only unauthorized outposts - built without permits - as illegal.
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