It is also speeding up the processing of 1,000 planning permissions.

The Palestinian Authority has said it will not return to peace talks without a freeze in settlement building.

The decision comes a day after a vote at the UN General Assembly upgraded the Palestinians’ status at the UN to that of non-member observer state.

According to the Israeli Haaretz newspaper, some of the new units will be between Jerusalem and the settlement of Maale Adumim.

Plans to build settlements in the area, known as E1, are strongly opposed by Palestinians, who say the development will cut the West Bank in two, preventing the creation of a contiguous Palestinian state.

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