Israel has approved a massive new building programme of Jewish settlement homes in the occupied Palestinian territories, following hard on the heels of the swearing-in of the US president, Donald Trump.

The defiant move, in opposition to most recent international opinion, comes as Israeli politicians have rushed to exploit what they see as a pro-Israel and pro-settlement US administration.

The announcement of 2,500 new housing units in the West Bank is one of the largest in years and marks a comprehensive rejection of December’s UN security council resolution, which described settlement building as a “flagrant violation” of international law and an obstacle to peace.

The decision, approved by the rightwing Israeli prime minister, Benjamin Netanyahu, and his defence minister, Avigdor Lieberman, seems certain to further increase tensions with Palestinians and the wider Middle East, already high over the Trump administration’s proposal to move the US embassy from Tel Aviv to Jerusalem.

Nabil Abu Rdainah, a spokesman for the Palestinian president, Mahmoud Abbas, said the move would have “consequences”. “The decision will hinder any attempt to restore security and stability; it will reinforce extremism and terrorism and will place obstacles in the path of any effort to start a peace process that will lead to security and peace,” he added.

The plans were condemned by Hanan Ashrawi, a member of the Palestine Liberation Organisation’s executive committee. She said: “It is evident that Israel is exploiting the inauguration of the new American administration to escalate its violations and the prevention of any existence of a Palestinian state.”

Although the Israeli government said the majority of new homes would be built in “major settlement blocs”, which Israel wants to keep as part of any eventual peace settlement, a number will be built in controversial hardline settlements, including Beit El.

Beit El is a settlement near Ramallah, in which Trump’s pick for the new US ambassador to Israel, David Friedman, has been involved. It has also received funding from the family of Trump’s son-in-law, Jared Kushner, according to Israeli media reports.

A day earlier, Netanyahu had told his security cabinet that he was also lifting all restrictions on Israeli construction in occupied East Jerusalem. That followed the approval on Sunday by the Jerusalem municipality of hundreds of new homes in East Jerusalem.

In a marked shift in policy, the US government – which has in the past usually been quick to condemn new settlement announcements – remained silent even as European countries denounced the plans.

At the time of writing there had been no US comment on Tuesday’s settlement construction announcement either.

About 400,000 settlers live in the West Bank and a further 200,000 in East Jerusalem, which Israel seized in the 1967 Middle East war.

Justifying the move, Lieberman said he and Netanyahu had agreed on the approval “in response to housing needs”.

“We are building and we will continue to build,” Netanyahu wrote, in a brief Facebook post.

Settlement construction was a contentious area of disagreement during the Obama years, when the White House sided with the Palestinians and the international community in condemning it as an obstacle to peace.

According to the anti-occupation group Peace Now, the first six months of 2016 saw Israel begin construction on some 1,195 new settlement units in the West Bank — which at the time was said to be a 40% increase on the previous six-month period.

Trump has signalled a softer approach to the settlements, and some of his top aides have close ties to the settler movement.

Oded Revivi, a key leader of the West Bank settlement movement, which led a delegation to the Trump inauguration, said he hoped the announcement was “just the beginning of a wave of new building … with the blessing of the new Trump administration”.

Trump has not outlined a vision for the Israeli-Palestinian conflict, although he has said he would be keen to broker a peace deal. His election platform made no mention of a Palestinian state.

His pledge to move the US embassy from coastal Tel Aviv to Jerusalem is vehemently opposed by the Palestinians. But since taking office, the White House has been vague about its plans for the embassy.

Netanyahu has been under mounting political pressure both from the far right in his coalition, which has been pushing him to exploit the new attitude of the Trump administration, and also from an escalating police investigation into alleged corruption.

The pro-settler Jewish Home party, led by education minister, Naftali Bennett, wants Netanyahu to move ahead with an explosive bill that would annex Maaleh Adumim, a major settlement of nearly 40,000 people near Jerusalem.

A vote on the legislation, which threatens to unleash fresh violence and damage already faded hopes for Palestinian independence, was put on hold this week, apparently so Netanyahu could coordinate his policy towards the Palestinians with the new administration. He is scheduled to visit the White House in early February.

The recent announcements on settlement plans for East Jerusalem and the West Bank have been seen by some as Netanyahu’s way of keeping the far right on side while avoiding the annexation issue.

Despite his promises to build, Netanyahu has also called for restraint, saying he doesn’t want to surprise the Trump administration. He said he intends to deploy “responsible and informed diplomacy” with the new US leadership.