Israel’s Prime Minister Benjamin Netanyahu cancelled plans to build 2,500 settlement units in Jerusalem due to international pressure, according to local media reports.

Israeli officials told Walla! Netanyahu stopped the construction of new settlement homes primarily due to fear of an “international crisis”, after the US had urged him not to follow through with the plan.

The housing units had been announced after the 12 June abduction of three Israeli settler teens, who were later found dead near Hebron. 1,500 units were to be built in south Jerusalem and a further 1,000 in West Bank settlements.

“The national status after Operation Protective Edge is explosive and complicated,” an unnamed officials told Walla!. “Israel needs to act carefully and not initiate new crises that will be added to unavoidable crises created by the operation,” they added.

The news emerged after Israel announced on Sunday that it will expropriate 400 hectares (988 acres) of Palestinian land in the occupied West Bank, which led to anger among Palestinians and alarmed Israeli peace campaigners.

The land seizure, in the Bethlehem area in the south of the territory, is the biggest of its kind in three decades, Peace Now said.

"On the instructions of the political echelon... 4,000 dunams at Gevaot (settlement) is declared as state land," said the army department charged with administering civil affairs in occupied territory, laying down a 45-day period for any appeal.

It said the move stemmed from political decisions taken after the June killing of three Israeli settlers in the same area.

A US State Department official described the Israeli announcement as "counterproductive to Israel's stated goal of a negotiated two-state solution with the Palestinians," urging "the government of Israel to reverse this decision."

The Etzion settlements council welcomed Sunday's announcement and said it was the prelude to the expansion of the current Gevaot settlement.

The existing settlement of Gevaot consists of only 10 families.

Haaretz newspaper said construction at the site had been on the agenda since 2000 and last year the government invited bids for the building of 1,000 new homes there.

Chief Palestinian negotiator Saeb Erakat called for diplomatic action against Israel.

"The Israeli government is committing various crimes against the Palestinian people and their occupied land," he told AFP.

"The international community should hold Israel accountable as soon as possible for its crimes and raids against our people in Gaza and the ongoing Israeli settlement activity in the West Bank and East Jerusalem."

Prime Minister Benjamin Netanyahu's policy of constant settlement expansion on land the Palestinians claim for a future state is deemed illegal by the European Union and an "obstacle to peace" by the United States and staunchly opposed by both.

"Today's announcement clearly represents Israel's deliberate intent to wipe out any Palestinian presence on the land and to wilfully impose a de facto one-state solution," senior Palestine Liberation official Hanan Ashrawi said.

Some 550,000 Israeli settlers live among 2.4 million Palestinians in the West Bank and occupied east Jerusalem, territory that Israel captured in the 1967 Six-Day War.

One-state solution

"As far as we know, this declaration is unprecedented in its scope since the 1980s and can dramatically change the reality in the Gush Etzion and the Bethlehem areas," Peace Now said.

"Peace Now views this declaration as proof that Prime Minister Netanyahu does not aspire for a new 'Diplomatic Horizon', but rather he continues to put obstacles to the two-state vision and promote a one-state solution.

"By declaring another 4,000 dunams as state land, the Israeli government stabs (Palestinian president Mahmud Abbas) and the moderate Palestinian forces in the back, proving again that violence delivers Israeli concessions while non-violence results in settlement expansion," it said.

"We are afraid that Netanyahu will carry out a lot of expansion because of the pressure he feels from his right wing and the feeling that the (Gaza) war did not end up with many successes," Peace Now official Hagit Ofran told AFP.

Israel arrests almost 600 Palestinians in August

Meanwhile, Israeli forces detained 597 Palestinians in the occupied West Bank and East Jerusalem in August, raising the number of Palestinians in Israeli prisons to more than 7,000, the Palestinian Prisoners Club said.

The majority of the arrests took place in East Jerusalem and Hebron, which is situated in the south of the West Bank, the NGO, based in Ramallah, said in a statement.

Many were arrested during demonstrations in support of Palestinians in Gaza, which was the focus of a deadly 50-day Israeli military onslaught.

Since the killing of the three Israeli settlers, at least 2,000 Palestinians have been questioned and detained, according to the NGO.