The US State Department said it was deeply concerned about an Israeli government decision to build 300 new homes in a Jewish settlement in the occupied West Bank and hundreds of homes in East Jerusalem, according to Radio Sawa.

"The United States continues to view settlements as illegitimate and we strongly oppose steps to advance construction in the West Bank and East Jerusalem," State Department deputy spokesman Mark Toner said in statements.

"Settlement expansion threatens the two-state solution and calls into question Israel's commitment to a negotiated resolution to the conflict," he said.

Israeli Prime Minister Benjamin Netanyahu authorized last Wednesday the immediate construction of 300 homes in Beit El near the West Bank city of Ramallah.

Netanyahu also approved planning for another 500 homes in occupied east Jerusalem.