Israel's government has announced plans for 3,300 new settler homes, less than a week after a Palestinian government of national consensus was unveiled.

Israel announced two plans on Thursday - one of 1,800 homes and a second for 1,500 homes. Many will be built in the occupied West Bank and East Jerusalem.

Israel's housing minister, Uri Ariel, called the announcement - the first since Israel halted peace talks in April - a "proper Zionist response to the establishment of the Palestinian terror cabinet".

Chief negotiator Sa'eb Erekat said the Palestinians were weighing a response to the plans, which he called a sign that Israel wanted an "escalation".

"Israel is using Palestinian national unity, a step welcomed by the international community, as their excuse to continue the colonisation of Palestine," Erekat said.

Dan Shapiro, US ambassador to Israel, also condemned the Israeli move. "We oppose settlement construction in the West Bank as well as announcements regarding such construction," Shapiro told Israel's Army Radio. "We would do so with or without this disputed case of a new Palestinian transitional government."

On Monday, Hamas and Fatah pieced together a government of independent technocrats that would pave the way for elections in the West Bank and Gaza Strip in six months.

The move was met with ire by Israeli authorities, who immediately announced punitive measures that included plans to withhold tax monies they collect on the Palestinians' behalf. Israel said it would not negotiate with the Palestinians in light of this new government, which it would also hold responsible for any rocket fire from the Gaza Strip.

On Wednesday, US Secretary of State John Kerry rejected Israeli criticism of Washington's recognition of the cabinet of technocrats.

Israeli Prime Minister Benjamin Netanyahu said he was "deeply troubled" by the decision, but Mr Kerry insisted the ministers were not affiliated to Hamas and would be watched "very closely".

Hamas is considered a terrorist group by Israel and the US.

The Islamist group ousted forces loyal to Palestinian Authority (PA) President Mahmoud Abbas and his Fatah faction in Gaza during clashes in 2007, a year after winning the last parliamentary elections, and set up a rival government. That left the PA in charge only of parts of the West Bank.

On Thursday, police shut down banks in Gaza after a number of the 40,000 Hamas-affiliated civil servants and security personnel clashed with some of the 70,000 employed by the PA in the coastal territory, after the former did not receive any wages from the new unity administration.