Jerusalem (CNN) -- The U.S. State Department and Palestinian Authority have stated their opposition to Israeli government plans for the construction of several hundred new housing units in the West Bank.
Israeli Defense Minister Ehud Barak approved last week the building of 277 housing units in Ariel, his ministry said Monday.
One hundred units are slated for families who had to leave behind their homes in Netzarim, when Israel pulled out of Gaza in 2005.
The State Department called the move counterproductive to the resumption of direct negotiations between Israel and the Palestinians.
"We have raised this issue with the Israeli government," State Department spokeswoman Victoria Nuland said Monday. "Like every American administration for decades, we do not accept the legitimacy of continued settlement activity."
The latest settlement plans come a week after Israel announced it would build 700 new homes in an east Jerusalem neighborhood annexed during the 1967 Six Day War.
"The world must wake up to what is happening here," the Palestinian Authority said in a statement Monday. "Israel is racing against time to make the two-state solution harder and harder by building on the land that is supposed to be the Palestinian state."
"The international community must ask Israel - how can you pretend to be ready to negotiate while expanding Jewish settlements in the West Bank?"
The Palestinian Authority plans to make a bid for statehood in the United Nations next month.
Israel has said the building in the major settlement blocks should not jeopardize future peace talks as it believes they will remain in Israeli control in any future peace deal.