The new settlement, which will be constructed north of the Palestinian city of Ramallah, is intended for Israeli settlers evacuated from Amona
, an outpost destroyed by Israeli authorities in February because it was not sanctioned.
The Security Cabinet on Thursday also advanced plans to construct 2,000 homes inside existing settlements. These homes are part of a plan approved two months ago to grow settlements by more than 5,500 homes. The plan was approved by Israeli Prime Minister Benjamin Netanyahu's government shortly after US President Donald Trump took office.
PLO Executive Committee member Hanan Ashrawi immediately blasted the announcements.
"Israel's policies remain unchanged as Prime Minister Benjamin Netanyahu and his extremist, racist coalition government continue to persist with their systematic policies of settler colonialism, apartheid and ethnic cleansing, showing a total and blatant disregard for Palestinian human rights, independence and dignity," Ashrawi said in a statement.
"Today's announcement once again proves that Israel is more committed to appeasing its illegal settler population than to abiding by the requirements for stability and a just peace," she added.
Ashrawi called on the international community to hold Israel responsible for the expansion of West Bank settlements.
The United Nations Security Council passed a resolution
in December condemning Israeli settlements constructed in the West Bank and East Jerusalem as illegal. These territories, occupied by the Israeli military since 1967, are where Palestinians plan to create their future state.
UNSC Resolution 2334 passed after the US abstained from voting. Former President Barack Obama was a critic of the settlements, viewing them as an obstacle to reaching a viable peace agreement between Israelis and Palestinians.
Thursday's announcement comes despite no agreement between the Trump and Netanyahu governments on how to address settlements. The President requested in February that Israel "hold back" on settlement expansion
A White House official on Thursday said Israel's decision to approve a new West Bank settlement did not amount to defiance of the President's request for a pause in settlement activity, rather it was "already in the queue."
The new settlement was already on track to be approved "before the President had a chance to lay out his expectations," said the official, who declined to be named due to the sensitive nature of peace talks.
The two sides have previously met in Washington and Jerusalem, as the Trump administration pushes forward with an Israeli-Palestinian peace plan.
"As we move into more detailed discussions regarding the possibilities for advancing Israeli-Palestinian peace, the Israeli government has made clear that Israel's intent is to adopt a policy regarding settlement activity that takes the President's concerns into consideration," the official said.
The official said the President's previous concerns about settlement activity being unhelpful to the peace process "remain the same."
United Nations chief António Guterres criticized the decision to build a new settlement.
"The Secretary-General has consistently stressed that there is no Plan B for Israelis and Palestinians to live together in peace and security. He condemns all unilateral actions that, like the present one, threaten peace and undermine the two-state solution," a statement from Guterres' office said.
There are 126 Israeli settlements in the West Bank (excluding East Jerusalem), according to the September 2016 report from the Israeli Central Bureau of Statistics.