JERUSALEM (Reuters) - Israel announced on Thursday plans to build some 3,000 more settler homes in response to the inauguration of a Palestinian unity government formed with the backing of Hamas Islamists opposed to Israel's existence.
Housing Minister Uri Ariel said he had issued notices inviting bids to construct 1,500 housing units. Israeli officials said that in addition, Prime Minister Benjamin Netanyahu had ordered planning to proceed for a further 1,500 settler dwellings.
"When Israel is spat upon, it has to do something about it," Ariel told Israel Radio, adding that construction tenders had been issued as a response to what he termed a Palestinian "terrorist government". Asked who had insulted Israel, Ariel, a far-right member of Netanyahu's cabinet, replied: "Our neighbors, and to a certain extent, the world."
Netanyahu has already expressed "deep disappointment" over a decision by the United States, Israel's main ally, to talk to the Palestinian administration despite Israeli calls to shun it.
A spokesman for Palestinian President Mahmoud Abbas, whose reconciliation deal with Hamas led to the establishment of a new government on Monday, said: "The Palestinian leadership will respond to this new settlement activity in an unprecedented manner." He did not elaborate.
Ariel did not cite locations but Israeli media said the new homes for which bids had been solicited would be erected in seven settlements in the occupied West Bank, some of them in areas Israel annexed to Jerusalem after the 1967 Middle East war.
Most countries regard settlements that Israel has built in territory it captured in 1967 as illegal. Their fate is a key issue in talks on an eventual independent Palestinian state - negotiations that collapsed in April.
The United States said on Monday it would work with the new Palestinian unity government as needed but would monitor its commitment to continued cooperation with the Jewish state.
Ariel accused the United States of breaking an understanding with Israel that it would not talk with the new government.
On Sunday, Netanyahu had urged the international community not to rush to engage with a Palestinian administration he said was a front for Hamas, a group classified as a terrorist organization by the United States and the European Union.
But Abbas's formation of a government of technocrats and his pledge to adhere to principles of non-violence and pursuit of peace paved the way for international acceptance that seemed to have left Netanyahu outmaneuvered.
Despite Netanyahu's appeal, the EU has also said it would work with the new Palestinian government, on condition it stuck to the principle of peace based on a two-state solution.
Hanan Ashrawi, a member of the Abbas-led Palestine Liberation Organization's Executive Committee, said the "government of national accord ... has been universally welcomed, with the exception of Israel in its blatant distortion of facts in order to destroy the chances for peace”.
Israeli Justice Minister Tzipi Livni, in an indirect rebuke of Netanyahu, called the first issuing of tenders since the peace talks collapsed "another diplomatic mistake".
Livni, head of a centrist party in the Netanyahu government and its chief peace negotiator, told Israel Radio it would now be harder "to enlist the world against Hamas".
An Israeli government official, commenting on Ariel's construction announcement, said the building would take place in areas that Israel wants to keep in any peace agreement. Other officials said most of the other 1,500 homes still in the planning stages would also be built in those settlement blocs.
U.S. Secretary of State John Kerry, who spearheaded the nine months of talks whose collapse Washington partly blamed on settlement building on land Palestinians seek for a state, has tried to play down the latest dispute with Israel.
"I've had several conversations with Prime Minister Netanyahu. We're completely talking about this on a day-to-day basis," Kerry said in Beirut on Wednesday.
His tone contrasted with that of an unidentified Israeli political official who was quoted by the pro-Netanyahu Israel Hayom newspaper as calling U.S. acceptance of the new Palestinian government "a knife in the back".
Israel froze U.S.-brokered peace talks with Abbas when the unity deal was announced on April 23 after numerous unsuccessful attempts at Palestinian reconciliation since Hamas seized the Gaza Strip from Fatah forces in fighting in 2007.
Some Israeli political analysts predicted Israel's campaign against the foreign aid-dependent Palestinian government would now shift to lobbying allies in the U.S. Congress to withhold funding, which typically runs at $500 million a year.