Israel’s security cabinet has given the go-ahead for a first new settlement to built on the West Bank in two decades.
An official statement said the construction will take place in the Emek Shilo area near Nablus.
Israeli Prime Minister Benjamin Netanyahu had been simultaneously negotiating with the US government on reducing settlement activity.
Palestinian officials have condemned the move.
“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,” Hanan Ashrawi, an executive committee member of the Palestine Liberation Organisation, was quoted as saying by Reuters news agency.
The administration of US President Donald Trump has yet to comment on the Israeli vote, which was unanimous.
The issue of Jewish settlements in the West Bank and East Jerusalem has long been a major source of dispute between Israel and the Palestinians.
The settlements are considered illegal under international law, though Israel disputes this.
The largest settlement, Amona, was evacuated by police last month after the Supreme Court ordered that it be dismantled because it was built on private Palestinian land.
Mr Netanyahu promised Amona residents that a new area would be found for them.