TEL AVIV, (AFP) – Israel has approved plans to build 523 homes in the West Bank, Jewish settlers said on Thursday, in the first step towards a new settlement “city” that drew furious condemnation from the Palestinians.

“After years, we are happy to announce that the government of Israel has decided to build a city in Gush Etzion,” David Perel, head of the Gush Etzion regional council, told AFP.

He said the defence ministry had approved plans for 523 homes in Gevaot, which is part of the Gush Etzion bloc in the southern West Bank. Israel’s defence ministry did not immediately respond to requests for comment.

Perel said the council had presented plans for a city of at least 6,000 homes in the year 2000, but had not received any approval until now.

“This is a huge achievement,” he said.

According to Hagit Ofran from the Israeli settlement watchdog Peace Now, there are currently around a dozen caravans at the site, but she said the new city could be home to as many as 25,000 people.

“This is not just another settlement: 6,000 units could house about 25,000 people. Maybe it’s not large as cities go, but in terms of settlements, it’s huge,” she told AFP.

She said the approval meant the initial plans could now be promoted by the Civil Administration’s higher planning council, which operates within the defence ministry.

“This sends the message that Israel is not considering the two-state solution. It means it will be much harder to divide the land (in any final peace deal) with another city there,” she said.

The new plans emerged during a week in which Israel has advanced the building of thousands of new settlement homes in east Jerusalem and the West Bank, sparking Palestinian and international condemnation.

On Thursday morning, Palestinian president Mahmud Abbas’s spokesman warned that Israel would be held “accountable” for its settlement construction.

“The settlers and the government of Israel should know they will be held accountable,” Nabil Abu Rudeina told AFP.

The comments appeared to be a veiled reference to the possibility that the Palestinians, having won upgraded United Nations status, could seek to join and then appeal to the International Criminal Court over Israeli actions.

The Palestinian condemnation followed criticism from the European Union’s foreign policy chief Catherine Ashton after Israel moved forward plans for thousands of homes in east Jerusalem settler neighbourhoods.

“I strongly oppose this unprecedented expansion of settlements around Jerusalem,” Ashton said in a statement early on Thursday, warning the plans could “seriously undermine the prospects of a negotiated resolution of the conflict.”

On Wednesday alone, Israel moved forward plans for 3,658 new settler homes, most of them in annexed east Jerusalem.

The announcements came just two days after the approval of another 1,500 homes in east Jerusalem, which prompted Washington to denounce Israel for its “pattern of provocative action.”

The United Nations and all the Security Council members except the United States on Wednesday condemned the settlement moves, with UN Secretary General Ban Ki-moon warning that Israel was on a “dangerous path.”