The United States said Monday it had expressed "serious concerns" over Israel's decision to allow settlers to continue building on Palestinian land despite new peace talks.
Israel plans to issue tenders for 1,000 new housing units in east Jerusalem and the occupied West Bank, in the face of anger from Palestinian negotiators.
Peace talks are due to resume on Wednesday in Jerusalem under a US-led initiative to revive moves toward resolving the longstanding Middle East dispute.
The talks are supposed to reach an agreement within nine months, and Washington fears that more settlement-building by its Israeli ally could derail the process.
"These announcements that you're referring to certainly come at a particularly sensitive time," State Department spokeswoman Jen Psaki told reporters.
"We continue to engage with the Israeli government to make our serious concerns known," she said, when pressed on the issue at a scheduled press briefing.
"Our policy has not changed," she added. "We don't accept the legitimacy of continued settlement activity."
Palestinian negotiator Mohammed Shtayeh has slammed the latest announcement on new building, saying it was proof Israel was "not serious in the negotiations."
But Israel's housing minister Uri Ariel, has dismissed criticism, declaring: "We shall continue to market apartments and build throughout the country."