Israel has unveiled preliminary plans for 238 new homes for Jewish settlers in East Jerusalem, reports say.
The Israeli plan for 158 homes in the Pisgat Zeev settlement and another 80 in Ramot were included in a building plan released by the housing ministry.
The move comes as the fledgling Middle East peace talks are in danger of collapsing over the settlement issue.
The Palestinians have threatened to walk away unless Israel renews its partial ban on West Bank settlements.
Palestinian negotiator Saeb Erekat told the AFP news agency that the move proved that Israel was intent on "killing" every opportunity to revive peace talks between the two sides.
Settlements or suburbs
The housing ministry's plans for Pisgat Zeev and Ramot were approved on Thursday by Prime Minister Benjamin Netanyahu, the Ynet news website said. There has been no comment from his office on Friday.
Palestinians regard Pisgat Zeev and neighbourhoods like it as settlements, and accuse Israel of using them to increase the Jewish presence in the mainly Arab east of the city, but Israelis see them simply as suburbs of Jerusalem.
The international community considers East Jerusalem occupied territory, and building on occupied land is illegal under international law.
This was the first such approval since March, when Israel gave the green light to plans for the construction of 1,600 new settler homes in East Jerusalem during a visit by US Vice President Joe Biden, prompting a major crisis with Washington.
Mr Netanyahu has been under pressure from Washington to extend a 10-month slowdown on the building of settler homes on occupied Palestinian land in the West Bank.
Although the freeze - which expired on 26 September - did not apply to East Jerusalem, building projects there too were quietly held back to avoid any political fallout, Israeli press reports said.
Earlier this week, Mr Netanyahu offered to renew the West Bank freeze if the Palestinians recognised Israel as a Jewish state, but the Palestinian leadership dismissed the proposal as unfair and unnecessary.
Israel has occupied the West Bank, including East Jerusalem, since 1967, settling close to 500,000 Jews in more than 100 settlements. They are considered illegal under international law, although Israel disputes this.
The Palestinians - backed by the Arab League - have pledged not to return to direct talks without a full settlement construction freeze, but have given the US a month to come up with a way to break the impasse.