Hassan Khater, the secretary- general of the commission, told a press conference in Ramallah that the Israeli authorities will allocate 3,000 dunams (741 acres) for the construction of the new settlement of Givat Yael, which will be home for 40,000 Israeli settlers.

Khater added that the new settlement will be constructed on lands far-right Jewish investors, most notably the self-proclaimed Zionist Irving Moskowitz, claim they bought from the West Bank village of Walajeh, to the southeast of Jerusalem.

The new settlement will be the largest project outside Jerusalem municipal boundaries since the construction of Pisgat Ze’ev, Gilo and Har Homa settlements.

In February, the Israeli regional committee decided to disqualify the building plans submitted by the Walajeh residents, and to demolish their 90 illegal houses, Khater said.

The development came as the Israel and the Palestinian Authority agreed to start the proximity peace talks through US mediation. The Arab League, which endorsed the US proposal, said the talks should not exceed four months.

Palestinian President Mahmoud Abbas and US President Barack Obama have agreed that the proximity talks would focus on the issues of security and borders, Palestinian news agency Wafa reported Tuesday.

The report added that the two leaders, in a phone conversation, have also emphasized that neither the Palestinians nor the Israelis should make any “provocative” action “that could destroy the confidence” during the talks.”

The settlement activities had prevented the resumption of the direct Palestinian-Israeli negotiations since stalled in December 2008, and it has been until this month that the two sides accepted a US proposal to hold indirect talks.

Israel captured East Jerusalem in the June 1967 War, annexed it, and has since built settlements there that are home to more than 200,000 Israelis.