Israeli Defence Minister Ehud Barak authorized on Monday to build 455 new illegal settlements in the occupied West Bank, rejecting again the call from United States to end settlements.
Israeli officials announced on Friday that Netanyahu intended to give the go-ahead for the new projects, drawing swift condemnation from the White House.
The World Court has ruled all settlements illegal under international law. The United States and European Union regard them as obstacles to peace.
U.S. President Barack Obama has brought strong pressure on Prime Minister Benjamin Netanyahu to halt settlements in order to open the way for a resumption of Israeli-Palestinian peace talks suspended since December.
However, Netanyahu has resisted the end to ongoing settlements.
Palestinian President Mahmoud Abbas has demanded a settlement freeze as a condition for returning to peace negotiations. There was no immediate Palestinian reaction to the Israeli announcement.
U.S. envoy George Mitchell is due back in the region later this week to try to finalise a deal with Netanyahu over settlements.
In an initial announcement on Monday, the Defence Ministry said Barak had signed 366 building permits and planned to issue a further 84. A corrected statement said he approved a total of 455 permits.
Some 2,500 housing units are currently under construction in settlements and Israeli officials said those projects would continue.
Palestinians, who want their own state in the West Bank and the Gaza Strip, see the settlements as a land grab as an occupier "state".
Israel occupied East Jerusalem along with the rest of the West Bank, Gaza, the Sinai Peninsula, and the Golan Heights in June 1967. In 1980 Israel annexed the eastern half of Jerusalem, declaring the whole of the city it 'eternal capital,' a step rejected by the UN Security Council.