Ariel Sharon appears to have pulled a bait-and-switch, agreeing to halt the building of new settlements in Gaza, while planning to expand settlement activity in the West Bank.
It has emerged that Israeli Prime Minister Ariel Sharon has given the go-ahead for 600 new homes in the largest Jewish settlement in the West Bank.
Mr Sharon and Defence Minister Shaul Mofaz agreed the plan two months ago but it has only now been made public.
The new homes are to be built in Maale Adoumin, close to Jerusalem. It is already home to 28,000 Jewish settlers.
Israel has committed itself to freezing settlement activity under the international "roadmap" peace plan.
Under the terms of the stalled peace plan, the Palestinians are obliged to crack down on militant attacks against Israel.
All settlements in the West Bank and Gaza are considered illegal under international law.
The BBC's Katya Adler in Jerusalem says Palestinians fear that Israel's plan to pull out of Gaza next year could mean Mr Sharon plans to bolster Jewish settlements in the West Bank instead.
Our correspondent reports that US officials say the building plans appear incompatible with the peace plan.