Israel has announced plans to build 1,400 new homes in Jewish settlements in the West Bank and east Jerusalem, territory the Palestinians claim for their future state.
Though it was no surprise, the announcement is likely to anger Palestinians and could cast a shadow on US-led peace efforts.
The statement had been expected after Israel released 26 long-serving Palestinian prisoners in late December, part of a deal made last summer when Israeli-Palestinian peace talks resumed. It was the third of four pledged prisoner releases.
A spokesman for Palestinian President Mahmoud Abbas, Nabil Abu Rdeneh, condemned the announcement, saying it undermines the "American efforts aimed at creating a peace track toward a two-state solution".
The announcement was expected earlier in January but was postponed, apparently to avoid any coinciding with last week's visit by US Secretary of State John Kerry. While Israel is not obligated to halt construction under the peace talks, Mr Kerry has urged restraint and said the building raises questions about Israel's commitment.
Prime Minister Benjamin Netanyahu previously has issued similar construction announcements to blunt criticism he faces at home over the prisoner releases as many of the Palestinians freed were convicted of killing Israeli civilians and soldiers. Israelis widely resent the release of the prisoners, who they view as terrorists.
"Releasing the prisoners was an immoral step that shouldn't have happened," said Isaac Herzog, chief of the opposition Labour Party. "The housing ministry's announcement at the time of negotiations damages negotiations."
Mr Herzog said Mr Netanyahu should have halted settlement construction rather than release the prisoners, and blamed hard-liners in the prime minister's coalition for the move.