Israeli PM Benjamin Netanyahu will approve more construction in West Bank settlements before considering a halt to building work, officials say.
The prime minister is expected to back work on hundreds of new homes next week in addition to 2,500 units already being built, a senior aide said.
He will then consider a temporary halt to settlement building, as requested by the US in a bid to restart peace talks.
The news angered the Palestinians who said it was "absolutely unacceptable".
"The only thing suspended by this announcement will be the peace process," Palestinian negotiator Saeb Erakat told the AFP news agency.
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