The United Nations, UK and US are condemning a new wave of “deeply troubling” construction of Israeli settlements in the occupied Palestinian territories.

Tobias Ellwood, the foreign office minister, said the planned construction of up to 300 new homes for Jewish settlers was a violation of international law, while American officials said the move undermined attempts at lasting peace between Israelis and Palestinians.

But the Israeli government said only 98 new housing units had so far been approved, in the West Bank settlement of Shilo, and “would not change its municipal boundary”.

A spokesperson for the foreign ministry said they were to accommodate families evicted from an unauthorised outpost of settlers in Amona, where they had built illegally on private land owned by local Palestinians.

The settlement has been the subject of several long-running court cases, with the Israeli Supreme Court ordering the government in December 2014 to completely evacuate and demolish the buildings within two years, after awarding Palestinian claimants thousands of dollars in compensation.

The 98 houses approved by the Civil Administration Planning Commission so far are part of a wider plan for up to 300 housing units and an industrial zone, in an area already inhabited by more than 4,000 Israeli settlers.

“Israel remains committed to a solution of two states for two peoples, in which a demilitarised Palestinian state recognises the Jewish state of Israel,” a spokesperson for the Israeli foreign ministry said.

“The real obstacle to peace is not the settlements – a final status issue that can and must be resolved in negotiations between the parties – but the persistent Palestinian rejection of a Jewish state in any boundaries.”

But the construction provoked further alarm in the international community as a year-long wave of violence and security crackdowns continues, with 34 Israelis and two Americans killed in Palestinian attacks and at least 218 Palestinians killed by the Israel Defence Forces, who said the vast majority were attempting stabbings.

The Israeli–Palestinian conflict intensifies Show all 10 1 /10 The Israeli–Palestinian conflict intensifies The Israeli–Palestinian conflict intensifies Medics evacuate a wounded man from the scene of an attack in Jerusalem. A Palestinian rammed a vehicle into a bus stop then got out and started stabbing people before he was shot dead AP The Israeli–Palestinian conflict intensifies Israeli ZAKA emergency response members carry the body of an Israeli at the scene of a shooting attack in Jerusalem. A pair of Palestinian men boarded a bus in Jerusalem and began shooting and stabbing passengers, while another assailant rammed a car into a bus station before stabbing bystanders, in near-simultaneous attacks that escalated a month long wave of violence AP The Israeli–Palestinian conflict intensifies Youths attend the funeral of Ahmad Sharake who was shot during clashes with Israeli forces in Jelazun refugee camp, near Ramallah, West Bank. Tensions in the area continue to run high following a series of stabbing attacks that have occurred around Israel in clashes between Palestinian youths and Israeli security forces Getty Images The Israeli–Palestinian conflict intensifies Palestinians throw molotov cocktail during clashes with Israeli troops near Ramallah, West Bank. Recent days have seen a series of stabbing attacks in Israel and the West Bank that have wounded several Israelis AP The Israeli–Palestinian conflict intensifies Women cry during the funeral of Palestinian teenager Ahmad Sharaka, 13, who was shot dead by Israeli forces during clashes at a checkpoint near Ramallah, at the family house in the Palestinian West Bank refugee camp of Jalazoun, Ramallah AP The Israeli–Palestinian conflict intensifies A wounded Palestinian boy and his father hold hands at a hospital after their house was brought down by an Israeli air strike in Gaza Reuters The Israeli–Palestinian conflict intensifies Palestinians look on after a protester is shot by Israelis soldiers during clashes at the Howara checkpoint near the West Bank city of Nablus EPA The Israeli–Palestinian conflict intensifies A lawyer wearing his official robes kicks a tear gas canister back toward Israeli soldiers during a demonstration by scores of Palestinian lawyers called for by the Palestinian Bar Association in solidarity with protesters at the Al-Aqsa mosque compound in Jerusalem's Old City, near Ramallah, West Bank AP The Israeli–Palestinian conflict intensifies Undercover Israeli soldiers detain a Palestinian in Ramallah Reuters The Israeli–Palestinian conflict intensifies Palestinian youth burn tyres during clashes with Israeli soldiers close to the Jewish settlement of Bet El, in the West Bank city of Ramallah, after Israel barred Palestinians from Jerusalem's Old City as tensions mounted following attacks that killed two Israelis and wounded a child

A spokesperson for the UN Secretary-General, Ban Ki-moon, said he was concerned that “the establishment of a new settlement near Shilo will make the prospect of a viable, contiguous Palestinian state more remote”.

”The Secretary-General urges Israel to halt and reverse such counterproductive decisions in the interests of peace and a just final status agreement,“ he added.

Mr Ellwood said the British Government condemned the plans as “the latest example of a series of worrying new settlement announcements in recent months”.

He added: “Settlements are illegal under international law. As underlined in the July report of the Middle East Quartet, settlement activity undermines trust and makes a two-state solution much harder to achieve.”

The American government issued unusually strong statements in the wake of last month’s agreement to hand Israel $38bn (£30bn) in military aid over the next 10 years.

Josh Earnest, the spokesperson for the White House, said every US administration since 1967 has opposed Israeli settlement activity in the occupied Palestinian territories and that Barack Obama’s administration believed the construction undermines a two-state solution.

Mr Earnest said Wednesday’s announcement contradicted assurances made by Israeli officials, adding: ”The actions of the Israeli government in announcing this settlement undermine the pursuit of peace.

Israel approves spending millions in West Bank settlement security

“I guess, when we're talking about how good friends treat one another, that's a source of serious concern as well.”

Mark Toner, a spokesperson for the US State Department, said the plan was “another step towards cementing a one-state reality of perpetual occupation that is fundamentally inconsistent with Israel's future as a Jewish and democratic state”.

”Such moves will only draw condemnation from the international community, distance Israel from many of its partners, and further call into question Israel's commitment to achieving a negotiated peace,” he added.

“It is deeply troubling, in the wake of Israel and the US concluding an unprecedented agreement on military assistance designed to further strengthen Israel's security, that Israel would take a decision so contrary to its long term security interest in a peaceful resolution of its conflict with the Palestinians.”

He added that the prospective development, closer to Jordan than Israel, would link a string of hardcore settler outposts to “effectively divide the West Bank”.

Saeb Erakat, a Palestinian MP and chief negotiator, said the proposal “affirms Israel's resolve to destroy the two-state solution”, and demanded the international community take action.