"The construction of 829 homes has been approved by a committee of the Israeli military in charge of the West Bank," said Lior Amihai, a Peace Now activist.
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"This is yet another move that threatens to derail the peace process," Amihai told AFP.
Palestinian president Mahmoud Abbas has warned that ongoing settlement building by Israel in the Palestinian territories threatens the future of Middle East peace talks, which stand at an impasse little more than three months after they began.
The new homes would be built north of Jerusalem in the settlements of Givat Ze'ev, Nofei Prat, Shilo, Givat Salit and Nokdim, Amihai said.
The latest move comes two weeks after Israel announced its largest plan for settler homes ever, saying some 20,000 would be built in the West Bank.
Prime Minister Benjamin Netanyahu cancelled the order after pressure from the United States, which brought the two sides to the table in July and as the Israeli premier sought to dissuade Washington from striking a nuclear deal with Iran.
That announcement had prompted the entire Palestinian negotiating team to resign in protest – resignations which Abbas has yet to accept.
Abbas told AFP last week his side is committed to the full period of talks agreed with Washington that will end in around April.
But if the talks end with no deal, the Palestinians have said they will pursue legal action against Israel's illegal building through international courts.
Commentators say the Palestinians will not back out of talks before their end date, as this would signal implicit responsibility for their failure.
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