Israel has given approval for the building of more than 1,000 new homes in Jewish settlements, and is to publish a call for tenders from contractors, the Housing Ministry said Sunday, dpa reported.
Israel also okayed the release of 26 Palestinian prisoners as part of a broader prisoner release designed to jump-start the peace process.
The announcements came ahead of the planned resumption of direct peace talks between Israel and the Palestinians in Jerusalem on Wednesday.
Palestinian negotiator Mohammed Shtayyeh was quoted as saying the housing announcement was "clear proof" that the Israeli government was "not serious about the talks."
The Israeli ministry said 1,187 apartments had received approval.
More than half are to be built in East Jerusalem, which Israel annexed shortly after the 1967 war, a move not recognized by most of the international community.
Other apartments are to be built at the West Bank settlements of Maaleh Adumim, Efrat and Ariel.
A first round of peace talks between the Israelis and Palestinians took place in Washington at the end of July, after a break of nearly three years.
Palestinian President Mahmoud Abbas had long insisted that there would be no talks without a freeze on Israeli settlements.
But an agreement was reached to allow the talks to take place after Israel said it was releasing more than 100 long-serving Palestinian prisoners.
The names of the first 26 prisoners were to be announced overnight. Fourteen of the prisoners were to be released to Gaza and 12 to the West Bank, Prime Minister Benjamin Netanyahu's office said in a statement.
The release could occur as soon as 48 hours after the announcement.
Germany, meanwhile, has reiterated its support for the peace talks.
Foreign Minister Guido Westerwelle said after meeting Israeli Justice Minister Tzipi Livni in Jerusalem that the peace talks were in the interests of the Israelis and the Palestinians, the wider region, and the whole world.