Senior Jerusalem officials on Thursday slammed the European Union for criticizing plans for Israeli construction in West Bank settlements.

The European Union on Thursday made a veiled threat to impose new economic sanctions on the settlements, calling on Israel to cancel its decisions to publish tenders for 1,500 settlement homes and advance plans for 1,800 more.

"It's strange that in the international community there are those who say that a Palestinian government, which a murderous terrorist organization is a member of, could advance peace," they said, "while others claim that building in Jerusalem - the capital of Israel - as well as in other places that even the Palestinians know will stay under Israeli sovereignty in any future arrangement, is a step that should be taken back."

The Israeli officials called on "the international community to regroup and focus on the really pressing issues in the Middle East, such as putting an end to the massacre of women and children in Syria."

Prime Minister Benjamin Netanyahu decided Thursday to unfreeze planning processes for 1,800 housing units in the settlements that have been frozen the last three months, in response to the establishment of the Palestinian unity government earlier this week.

The announcement came just hours after the Housing Ministry published tenders for 1,500 housing units in the West Bank and East Jerusalem on Wednesday, a move termed by Minister Uri Ariel as a response to the new Palestinian unity cabinet.

The United States said it was "deeply disappointed" by Israel's announcements of settlement expansion. "We said on a regular basis that such actions are unhelpful and it is hard to see how these settlements contribute to peace," U.S. State Department deputy spokesperson Marie Herf said at a press briefing.

In a statement, the European Union pledged "to continue monitoring the situation and act accordingly." The EU last year planned to impose a series of economic sanctions on settlements, which it froze at Washington's request so as not to harm the Israeli-Palestinian peace talks then being shepherded by U.S. Secretary of State John Kerry.

The planned moves included EU directives to marketing networks on the continent to specially mark imports originating in West Bank settlements, and warning European businesspeople not to make deals or investments in the settlements.

The Palestinian Authority levied sharp criticism of the decision on Thursday, calling it another nail in the coffin of the two-state solution.

PLO Executive Committee Member Hanan Ashrawi said the Palestinians will appeal to the UN Security Council and the General Assembly, demanding they act against settlement construction. Mahmoud Abbas' adviser Nabil Abu Rudeina said the Palestinian reaction will be "unprecedented."

He said the announcement comes as the international community is expressing support for the Palestinian unity government. He added that Israel should internalize the fact that its settlement policy is not advancing any solution.

Chief Palestinian negotiator Saeb Erekat said that the Palestinian Authority is currently discussing options, and considering whether to utilize the help of the organizations it has already turned to or to apply for more, primarily the International Criminal Court.

He added that steps by Palestinian President Abbas are being coordinated with the Arab League and the U.S., adding that he will not make any drastic moves without their backing.