The Palestinian leadership harshly criticized the Israeli decision.

Netanyahu’s office said in a press statement that ministers have decided on Saturday night to authorize construction of a few hundred housing units in the West Bank settlement blocs of Gush Etzion, to the south of Bethlehem, Ma'aleh Adumim, to the east of Jerusalem, Ariel, to the south of Nablus and Kiryat Sefer, to the southwest of Ramallah.

Netanyahu said in several occasions that the settlement blocs would not be detached from Israel under any circumstances. Israel has long been claiming that major settlement blocs in the West Bank would remain under Israeli control under any possible peace agreement with the Palestinians.

The move comes a day after unknown assailants killed five members of an Israeli family in the settlement of Itamar, near the West Bank city of Nablus. The PA has condemned the attack.

Among the participants in the specially called meeting were Netanyahu, Vice Premier Moshe Ya’alon, Defense Minister Ehud Barak and Homeland Security Minister Matan Vilna’i. Sources in the Netanyahu’s Office told Israel Radio that several alternatives to further settlement building were discussed during the meeting, such as starting a new settlement, or widening the settlement of Itamar but in the end the decision, supported by Barak, was to continue construction in settlement blocs.

The report said that Netanyahu’s office notified the US administration on Saturday night of Israel’s intention to approve new settlement construction.

Israel’s decision to end a partial moratorium on construction in the West Bank in September 2010 caused the suspension of the US-brokered negotiations after the Palestinians walked out in protest. Last month, The United States vetoed an Arab draft resolution calling upon Israel to stop the settlement activities and condemning them.

Israeli Interior Minister Eli Yishai responded to the government's move saying: “I would not stop with 400 units; we need at least 1,000 new housing units for each person murdered.”

“After this terrible and shocking murder, nothing will comfort the families,” Yishai said. “The (Palestinian) Authority is raising a generation of murderers.”

Danny Dayan, the chairman of Council of Jewish settlements in Palestinian territories (Yesha), described the government’s decision a “small step in the right direction,” adding that a new neighborhood should be built in Itamar in honor of those who were murdered there.

“It’s a shame that it took a murder of parents and their children for the Netanyahu government to approve the construction of new homes,” he said.

Meanwhile, Nabil Abu Rdaineh, spokesman for Palestinian President Mahmoud Abbas, said the decision is “wrong and unacceptable.”

Abu Rdaineh told the official Wafa news agency that Israeli attitude ruins everything and leads to new problems. “The atmosphere created by this decision isn’t helpful, it only creates problems. Peace necessitates courageous decisions.”

Sa’eb Erekat, a member of the Palestine Liberation Organization's executive committee, said that the Palestinian leadership “totally and strongly condemn and reject the Israeli decision.”