Israel says it has approved 2,500 West Bank settlement homes. Defense Minister Avigdor Lieberman and Prime Minister Benjamin Netanyahu agreed on the approval "in response to housing needs," according to a statement from the former's office on Tuesday.
He says the majority of the housing units will be built in settlement blocs, areas where most settlers live and which Israel wants to keep under its control under any future peace deal with the Palestinians.
The election of US President Donald Trump has emboldened pro-settlement lawmakers, including Lieberman and Netanyahu. Trump has indicated that he will be more sympathetic to Israeli settlement construction.
Much of the international community views settlements as illegal and an obstacle to peace with the Palestinians.
Gaza's Hamas rulers are warning the US not to move its embassy in Israel to Jerusalem, saying such a step could unleash new violence.
In a statement Tuesday, the Islamic militant group said a move would "open a new chapter of conflict" and "add fuel to the fire."
Hamas is sworn to Israel's destruction. It has killed hundreds of Israelis in suicide bombings, and fought three wars with Israel since seizing control of Gaza 10 years ago.
The rival Palestinian Authority has also urged Trump not to follow through on his campaign promise to move the embassy. The Palestinians seek east Jerusalem, captured by Israel in 1967, as their hoped-for capital.
In southern Gaza, dozens of Palestinians demonstrated against the move. Some burned a caricature of Trump.