Israel has given the Palestinian Authority (PA) permission to build 1,000 new housing units in the West Bank's Area C, according to Palestinian sources.
The sources said that the unusual decision was made by Defense Minister Benny Gantz amid Israeli and international efforts to strengthen the PA, which began with the formation of the new government.
The Israel Civil Administration, an IDF body overseeing the West Bank, was set to meet next week to approve the new Palestinian construction as well 2,200 new settler homes.
In accordance with the Oslo Peace Accords, Area C — which covers about 60% of the West Bank's territory — is under both Israeli civil and military control.
The area has become a flashpoint of frequent clashes between Jewish settlers and Palestinians as both sides attempt to seize lands through wildcat construction.
The sources said that Ramallah sees great diplomatic significance in the decision after pressuring Israel to allow new construction in Area C for years, attempts that got the cold shoulder from Israeli authorities, adding that the decision holds within it great diplomatic significance.
Likud MK Shlomo Karahi protested the move, saying that Gantz's action would lead to a disaster.
"Instead of deepening and expanding Israel's control and enforcement over [the West Bank], it is helping the Palestinians advance their dangerous plan to take over the territory," he said. "This is a disaster for settlement and a serious security risk for the residents."
Earlier Wednesday, Gantz met with CIA Director William Burns who also held a separate meeting with Prime Minister Naftali Bennett while visiting Israel.
In his meeting with Gantz, the two "discussed various initiatives for intelligence cooperation and the need to strengthen the Palestinian Authority as well as additional moderate actors in the region," the Defense Ministry said.
Burns was also due to hold talks with Palestinian President Mahmoud Abbas in the West Bank city of Ramallah.
British MI6 chief Richard Moore was also set to meet with Abbas on Wednesday.