Israel originally announced in 2006 that it would build Maskiot, then froze the plan after international outcry. But earlier this year, nine Israeli families settled in mobile homes at the site, which Palestinians claim as part of a future state.
Settlers say around two dozen more families are waiting to join them.
Palestinian negotiator Saeb Erekat accused Israel of undermining U.S.-backed peace talks.
"This is destroying the process of a two-state solution," Erekat said. "I hope the Americans will make the Israelis revoke the decision. I think they can make the Israelis do this."
When talks renewed last year after a seven-year breakdown, Israel promised not to establish new settlements in the West Bank. The two sides set a goal of reaching a final peace accord by the end of the year, but have since scaled back their ambitions, in part because disputes over Israeli settlement have impeded progress on peacemaking.
Palestinians want the final deal to outline the formation of a Palestinian state in most of the West Bank, the Gaza Strip and east Jerusalem. Israel captured those territories in the 1967 Middle East war.
'Commitments'
Asked
to comment on the revival of the plan to build Maskiot, Israeli
government spokesman Mark Regev said, "Israel will stand by its
commitments," and noted that Barak has not yet given final approval for
the construction.
He would not elaborate. But Israel historically has interpreted its commitments on halting settlement expansion differently from the rest of the international community.
The Maskiot community is made up of settlers Israel evacuated from Gaza when it left the territory three years ago. When it withdrew from Gaza, Israel promised not to relocate evacuated settlers to the West Bank.
Earlier this year, Palestinian President Mahmoud Abbas briefly called off peace talks over continued Israeli construction in the West Bank and east Jerusalem.
Former military base
Secretary
of State Condoleezza Rice has sharply criticized the building, saying
it hampers peace efforts, but the U.S. has not penalized Israel.
Maskiot had decades ago been established as a military base, and four years ago a religious school was set up there. But no one had lived at the site until February.
Many Israeli settlements have been established in precisely that manner, beginning as military points that are gradually converted into fledgling communities that gradually grow.
Like many settlers, those at Maskiot are Orthodox Jews who believe God gave the West Bank to the Jewish people.