The Israeli government put 91 Jewish settlements on a national priority funding list on Sunday, adding six to a roster of dozens of enclaves already eligible for supplemental state cash.
A senior Palestinian official condemned the decision as an obstacle to U.S.-brokered peace talks that resumed just a week ago after a three-year rupture over settlement building on land Palestinians seek for a state.
At its weekly meeting, the Israeli cabinet increased by six the number of settlements built on land Israel captured in a 1967 war on a "national priority" spending list, by adding nine while removing three others.
The "list of settlements with national priority" is a longstanding roster of nearly 700 border towns and settlements eligible for extra development funding above and beyond their normal budgets.
Most communities on the list are either on Israel's northern border with Lebanon or to the south, across from neighboring Egypt.
Ninety-one are settlements built in the West Bank, where Palestinians seek to establish an independent state. Those settlements are deemed illegal by the World Court and are opposed by most countries.
Three settlements were removed from a previous list from several years ago, while nine others were added, among them enclaves deep inside the West Bank, beyond the traditional blocs Israel insists it will keep under any peace deal.
"We condemn this step," Nabil Abu Rdainah, spokesman for Palestinian President Mahmoud Abbas told Reuters, accusing Israel of seeking to "put obstacles in the way of U.S.-backed (peace) efforts."
The Israeli settlement watch group Peace Now said that, by taking steps to expand West Bank settlements, Israel "calls into question whether this government is truly ready to negotiate in good faith."
Abbas had long demanded a freeze in settlement construction as a condition to resuming peace talks, but Kerry won Palestinian agreement to resume negotiations after Israeldecided to release 104 prisoners, many convicted of lethal attacks and behind bars for more than 20 years.
Israeli media pundits interpreted the unpopular decision to free prisoners as a compromise with ultra-nationalists in Israel's cabinet opposed to curbing settlement construction.
Settler-champion cabinet minister Silvan Shalom said Abbas had rejected an Israeli offer to freeze construction in some settlements rather than free the prisoners, Israel Radio said.
Additional reporting by Ali Sawafta in Ramallah; Writing by Allyn Fisher-Ilan and Ori Lewis; Editing by Robin Pomeroy