JERUSALEM (AP) -- Israel announced plans Wednesday to build more than 1,500 homes in Jewish settlements in east Jerusalem and the West Bank, dealing a setback to newly relaunched peace efforts hours after it had freed a group of long-serving Palestinian prisoners.
The construction plans drew angry condemnations from Palestinian officials, who accused Israel of undermining the U.S.-led talks by expanding settlements on the lands where they hope to establish an independent state. U.N. chief Ban Ki-moon also condemned the Israeli decision, and Washington said it would not create a "positive environment" for the negotiations.
Israel had freed the 26 Palestinian prisoners as part of a U.S.-brokered agreement to restart the talks. The construction was meant to blunt anger over the release of the prisoners, all of whom had been convicted of murder in the deaths of Israelis.
Israel's Interior Ministry said 1,500 apartments would be built in Ramat Shlomo, a large settlement in east Jerusalem, the section of the holy city claimed by the Palestinians as their capital. It also announced plans for archaeology and tourism projects near the Old City, home to Jerusalem's most sensitive holy sites.
Israel first announced the Ramat Shlomo plan in 2010 during a visit to Israel by U.S. Vice President Joe Biden, sparking a diplomatic rift with Washington that took months to mend. Wednesday's decision is the final approval needed, and construction can begin immediately, officials said.
Ofir Akunis, a lawmaker from Prime Minister Benjamin Netanyahu's Likud Party, said construction also had been approved for several West Bank settlements.
"The building in Judea and Samaria will continue and be intensified," said Akunis, using the biblical term for the West Bank.
In addition, he told parliament that Netanyahu had given orders to "advance plans" for more than 2,000 homes in a longer list of settlements across the West Bank.
While these projects still need additional bureaucratic approvals, they are especially provocative because several of the settlements are deep inside the West Bank and almost certainly would have to be dismantled as part of a peace deal.
Israel captured east Jerusalem, along with the West Bank and Gaza Strip, in the 1967 Mideast war. The Palestinians seek all three areas for a future state.
The Palestinians, along with virtually all of the international community, consider the settlements to be illegal or illegitimate.
Nabil Abu Rdeneh, a spokesman for Palestinian President Mahmoud Abbas, condemned the settlement plans, saying they were "destructive to the peace efforts and will only lead to more tensions."
"It's a message to the international community that Israel is a state that doesn't abide by international law and continues to put obstacles in the way of peace," he said.
In Washington, State Department spokeswoman Jen Psaki said, "We do not consider continued settlement activity or East Jerusalem construction to be steps that create a positive environment for the negotiations."
U.N. spokesman Martin Nesirky said the secretary-general "deplores" the Israeli announcement.
"Settlement activity is contrary to international law and constitutes an obstacle to peace," Nesirky said. "Any measures that prejudge final status issues will not be recognized by the international community."
The previous round of peace talks broke down in late 2008 and remained frozen for nearly five years, in large part because of Palestinian objections to settlement construction.
The Palestinians say continued expansion of settlements, now home to more than 500,000 Israelis, makes it increasingly difficult to divide the land between Israel and a Palestinian state.
Under heavy U.S. pressure, the Palestinians dropped a longstanding demand for a settlement freeze over the summer and agreed to resume negotiations with the understanding that Israel would slow construction.
As part of that arrangement, Israel agreed to release 104 of the longest-serving Palestinian prisoners, most of whom had committed their crimes before a landmark interim peace deal was reached in 1993. Wednesday's release was the second of four groups in the coming months.
Israeli and Palestinian negotiators have been meeting secretly since late July. Under orders from U.S. Secretary of State John Kerry to keep quiet, they have said little about the discussions, although Palestinian officials say all core issues are being discussed.
The officials, speaking on condition of anonymity because of Kerry's orders, said the talks are currently focusing on Israeli security demands and the contours of future borders.
The future of the settlements would fit heavily into those discussions. It remains difficult to see how the U.S. can bridge the wide gaps between the sides.
Netanyahu opposes a full withdrawal from the West Bank, saying Israel would need to keep significant portions of the territory for security needs.