The Israeli defence ministry today authorised further construction in a Jewish settlement on the occupied West Bank.

The decision came prior to the arrival in Israel of the US vice-president, Joe Biden, who is expected to announce a new round of indirect peace talks.

Approval for 112 new flats in Beitar Illit, an ultra-Orthodox settlement near Bethlehem, was given despite a 10-month partial curb on settlement construction announced by the Israeli government under heavy US pressure in November.

The decision to approve the building work appeared to be an attempt to appease members of Israel's rightwing coalition government. It was greeted with dismay by Palestinian officials.

George Mitchell, the US special envoy, has spent months attempting to get Israelis and Palestinians to restart negotiations, and was hoping a new round of indirect "proximity" talks would begin today.

"If the Israeli government wants to sabotage Mitchell's efforts by taking such steps, let's talk to Mitchell about maybe not doing this if the price is so high," Saeb Erekat, the chief Palestinian negotiator, said.

For many months, Palestinian officials resisted any return to negotiations with Israel, saying all settlement construction should first be halted in line with the obligations of the US "road map" of 2003.

All settlements on occupied territory are illegal under international law.

Finally, under international pressure, the Palestinian president, Mahmoud Abbas, was persuaded to enter a four-month period of shuttle diplomacy, led by Mitchell and due to start in the coming days.

Although the US administration last year demanded Israel halt all settlement building, it eventually welcomed the partial curbs imposed by the Israeli prime minister, Binyamin Netanyahu.

The temporary curbs did not apply to east Jerusalem, public buildings or around 3,000 flats whose construction was already under way.

The Israeli defence ministry said the Beitar Illit flats had been approved under the previous Israeli government and that construction needed to happen now, for unspecified security reasons.

However, Hagit Ofran, of the Israeli group Peace Now, which monitors and opposes settlements, said the construction directly contradicted Netanyahu's settlement curbs, which prevented building of any flats – even if already approved – on which work had not yet started.

"It is a very unfortunate welcome that the government of Israel is giving to the vice-president," she said.

"It is as if they want to make it look like they want peace but on the other hand to torpedo the chance for these talks to succeed."

Last week, another plan for 600 new flats in the east Jerusalem settlement of Pisgat Zeev passed through an initial stage of the approval process.