Ammon News - AMMONNEWS - Israel's housing ministry said it was advancing plans for nearly 1,500 new settlement homes in the West Bank and east Jerusalem in response to the new Palestinian unity government backed by the Islamic militant group Hamas , Associated Press reported.

The housing minister, Uri Ariel, said the move was a "fitting Zionist response to the formation of a Palestinian terror government', adding that the housing plans were "just the beginning".

Tenders were issued on Wednesday for about 900 housing units in the West Bank and about 560 units in east Jerusalem, territories that Israel captured in the 1967 war and which the Palestinians claim for their future state. The tenders represent the final governmental approval before construction can begin.

The chief Palestinian peace negotiator, Saeb Erekat, said the settlement announcement was "a clear sign that Israel is moving toward a major escalation" and that the Palestinians were weighing their response to the announcement.

It was the first announcement of settlement construction after nine months of US-mediated Israeli-Palestinian peace talks officially ended in April. The US ambassador to Israel, Dan Shapiro, told Army Radio on Thursday that the US opposed the planned settlement construction.

The Israeli justice minister, Tzipi Livni, who was Israel's chief negotiator in the last round of peace talks, told Army Radio the announcement was a "political mistake … that will only distance us from the ability to recruit the world against Hamas".

Lior Amichai, of the Israeli settlement watchdog Peace Now, also condemned the announcement. He said: "It shows the government's policy is moving us towards one state."

As the peace talks ended with few signs of progress, rival Palestinian factions Hamas and Fatah moved to end their seven-year rift. The two groups last week agreed to a new unity government comprised of independent technocrats but backed by the two groups.

Israel had vowed to take action in response to the new Palestinian unity government because it is supported by Hamas, which is pledged to the destruction of the Jewish state and has carried out scores of deadly attacks against Israelis since it was founded in the late 1980s.

The construction and housing ministry announcement said the settlement tenders were "part of the reaction efforts" to the new Palestinian government.

Israel has urged the west to shun the new government, but the US and the European Union have said they would work with it. The US secretary of state, John Kerry, defended the decision during a visit to Lebanon on Wednesday, saying none of the ministers had ties to Hamas.

Hamas has been blacklisted as a terror group by the west, while Fatah is led by the western-backed Palestinian president, Mahmoud Abbas. Long-running tensions between the two groups boiled over in 2007, when Hamas seized control of the Gaza Strip, in effect confining Abbas's security forces to the West Bank.