JERUSALEM � Israel approved plans this week to build 330 new homes in a suburban West Bank settlement north of Jerusalem. The move was denounced by the Palestinian Authority as “a slap in the face of the peace process” and called on the Quartet of the United States, European Union, United Nations and Russia to “act to get Israel to revoke the decision.”

Saeb Erakat, the Palestinians’ chief negotiator, said: “This is a provocative action by Israel that demonstrates its intention of further strengthening illegal occupation and colonization of Palestinian territory.”

He branded the timing of the decision as “outrageous” because it came on the eve of American-Israeli-Palestinian talks to assess the two sides’ performance under the international road map for peace. Expansion of settlements is supposed to be frozen under the terms of the peace process. The settlements, illegal under international law, already account for nearly 40 per cent of West Bank territory. The U.N. warned recently that they are making the achie-vement of an eventual two state solution elusive.

Israel, which denied the plan was being launched in retaliation for Thursday’s massacre of eight students in a Jerusalem yeshiva seminary, defended the decision, despite earlier undertakings to stop building on the West Bank. The 330 homes in Givat Ze’ev were part of a projected 750 dwellings approved in 1999 and frozen after the Palestinian intifada broke out a year later.

Building was said to have been suspended for economic reasons. Developers feared no one would buy the homes, designated for ultra-Orthodox Jewish families. In a new, less violent climate, they were eager to cash in.

Previously, Israel had insisted on its “sovereign right” to build within Jerusalem’s municipal borders, expanded to include the Arab half of the city after the 1967 war. Givat Ze’ev lies just across the Jerusalem-Ramallah border.

Mark Regev, the Prime Minister’s spokesman, said last night: “Israel will not agree to a total freeze within the settlement blocks. That would be unrealistic. Givat Ze’ev is one of the Jerusalem suburbs, even though it is not within the municipal borders.”

He argued that it lay within the large settlement blocks, close to the pre-1967 border, that Israel expected to retain after a final peace agreement with the Palestinians. “Building inside areas that will be staying inside Israel is not problematic for peace,” he said.

The Givat Ze’ev initiative is unlikely to appease the settlers, still seething after the attack on their flagship Mercaz Harav yeshiva. Many are threatening to establish eight unauthorized West Bank outposts as a “suitable Zionist response” to the killing of the students.