Israel says it will build 3,000 new homes for Jewish settlers in the occupied West Bank.
The aim was to fulfil demands for housing and "return to normal life", the defence ministry said.
A Palestinian official condemned the move and warned that chances for peace were being destroyed.
It is the third such announcement by Israel since US President Donald Trump took office. Mr Trump has hinted he will be more supportive on the issue.
The announcement came as Israeli security forces started evicting hardline settlers from an unauthorised outpost.
Thousands of soldiers and police have been sent to Amona, which the Israeli Supreme Court says must be evacuated because it is built on private Palestinian land.
More than 600,000 Jews live in about 140 settlements built since Israel's 1967 occupation of the West Bank and East Jerusalem. The settlements are considered illegal under international law, though Israel disputes this.
There are also more than 95 outposts - settlements built without official authorisation from the Israeli government - across the West Bank.
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Tuesday's announcement follows on from the recent approval of 2,500 housing units in the West Bank and 550 in East Jerusalem.
Palestinian labourers work at a new housing project in the Israeli settlement of Ariel (25 January 2017)Image copyrightAFP
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Donald Trump has indicated he will be more sympathetic to settlement construction
Many in the international community condemned those, saying they undermined hopes of creating a future Palestinian state. But the White House did not express any disapproval.
Mr Trump has indicated that he will be more sympathetic to settlement construction than his predecessor, Barack Obama, and has appointed a staunch settlement supporter as his ambassador to Israel.
Palestine Liberation Organisation (PLO) Executive Committee member Hanan Ashrawi warned that the "frenzied escalation of Israel's illegal enterprise" signalled "the final demise" of the two-state solution to the Israeli-Palestinian conflict.
"The silence of the new American government, including those who actively support the settlements in the White House and the administration as a whole, has emboldened Netanyahu to persist with his settlement activities," she said.
West Bank settlements map
The BBC's Yolande Knell in Jerusalem says that although many members of the Israeli governing coalition strongly support settlements, they have been unable to prevent plans to demolish the homes of about 50 Israeli families at Amona.
Located on a hilltop near the settlement of Ofra, north-east of Ramallah, the illegal outpost was built in 1996 on land registered as privately-owned by Palestinians
In 2006, following a decision by the Israeli Supreme Court, nine permanent structures in the outpost were demolished, sparking clashes between settlers and security forces.
In December 2014, the court ordered the Israeli government to completely remove Amona within two years. But the deadline was recently extended until 8 February.
Israeli settlers and youths watch as security forces gather at the Amona outpost, north-east of Ramallah, on 1 February 2017Image copyrightAFP
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Youths gathered at Amona on Wednesday to protest against the evacuation of the outpost
On Tuesday morning, the Israeli military posted leaflets at Amona ordering the settlers to leave within 48 hours. Israeli media reported that order came into effect at midnight on Monday, and that the settlers had until midnight on Wednesday to remove their property.
Dozens of youths set fires to tyres at the entrance to the outpost on Wednesday morning and threw stones at soldiers and police as they advanced.
"This is a difficult and sad day for the people of Israel, a day the law enforcement authorities are asked to implement a High Court decision ordering the destruction of a community the state helped found, and evacuation of residents from the homes they have been living in for 20 years," said Public Security Minister Gilad Erdan.
"Despite the difficulty and the great pain, I urge all those on the hilltop: Let the police and security forces do their jobs."
SOURCE BBC NEWS
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