Jerusalem (AFP) - Israel said Thursday it will give final approval to the construction of 2,500 new homes in the occupied West Bank, the first tranche of settlements since the controversial US embassy move to Jerusalem.

The announcement was slammed by the Palestinians, as prospects of a peace accord between the sides appeared as distant as ever.

Israeli Defence Minister Avigdor Lieberman announced his intention to request final approval from a planning committee for the building of 2,500 new homes in 30 West Bank settlements.

"The 2,500 new units we'll approve in the planning committee next week are for immediate construction in 2018," Lieberman said in a statement, adding he would also seek the committee's approval for a further 1,400 settlement units for later construction.

Palestinian presidential spokesman Nabil Abu Rudeina said Washington was complicit in the latest move.

"The continuation of the settlement policy, statements by American officials supporting settlements and incitement by Israeli ministers have ended the two-state solution and ended the American role in the region," he said in a statement published by official Palestinian news agency WAFA.

The 2,500 units include 400 homes in Ariel, 460 in Maale Adumim, 330 in the Etzion bloc, and a retirement home in Elkana, according to Lieberman.

Israel's West Bank planning committee was set to convene on Wednesday next week to discuss the request, though this was not officially confirmed.

"We're continuing the development momentum of the Judaea and Samaria settlements and are approving thousands of new units," Israeli Prime Minister Benjamin Netanyahu said in a post on his Twitter account, using the biblical term for the West Bank.

"We will soon approve more units."

- 'Torpedoing peace prospects' -

Israel's West Bank settlements are considered illegal under international law and are bitterly opposed by Palestinians.

Neighbouring Jordan, along with Egypt one of only two Arab states to have signed a peace treaty with Israel, slammed the latest move.

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"Unilateral Israeli measures, in particular settlement plans, are systematically aimed at torpedoing any prospect of peace," Information Minister Mohamed Momani wrote in an Arabic-language statement.

In a recent appeal to the International Criminal Court, the Palestinian foreign ministry called Israeli settlements "the single most dangerous threat to Palestinian lives and livelihoods".

Thursday was the first major settlement announcement since the US moved its embassy to Jerusalem on May 14, a move that infuriated Palestinians and intensified protests on the Gaza border, with 60 killed in clashes with Israeli forces that day.

Israel sees the entire city as its undivided capital, while the Palestinians want the eastern sector as the capital of their future state.

The Palestinians have said that in light of US President Donald Trump's decision to move the embassy, they could no longer trust Washington in its traditional role of brokering a peace deal with Israel.

Israeli settlement watchdog Peace Now said that data, including Thursday's announcement, showed a leap in settlement-building during Trump's term so far.

"In the year and a half since President Trump took office some 14,454 units in the West Bank have been approved," the NGO said in a statement.

That, it added, "is more than three times the amount that was approved in the year and half before his inauguration (4,476 units)."

- US ambassador blasted -

US ambassador to Israel David Friedman maintains, however, that Trump "hasn't failed on the ultimate deal," the term the US president has used to describe peace with the Palestinians.

In a Wednesday interview with Israeli Channel 10, Friedman said Trump was working on a deal, which was expected to be presented "within months".

While Israel would expect to retain certain settlements in any two-state peace deal, longstanding international consensus has been that their status must be negotiated.

Friedman, who is Jewish and a longstanding supporter of Jewish settlement in the Israeli-occupied West Bank, is deeply unpopular among Palestinians.

Palestinian president Mahmud Abbas in March labelled him a "son of a dog".

And on Wednesday Abbas's adviser for religious affairs, Mahmud Habbash, called Friedman a "terrorist settler", in comments published by WAFA.

That came after a picture was published in Israeli and Palestinian media of the ambassador being presented with a provocative photo of annexed east Jerusalem with the revered Al-Aqsa mosque erased and replaced by a simulation of a Jewish temple.

A US embassy statement said the doctored image was pushed in front of Friedman without his consent during a visit to a charitable institution in Bnei Brak, near Tel Aviv.