Despite recent international condemnation of ongoing settlement construction, Israeli Defense Minister Ehud Barak has given final permit for plans to build about 300 new housing units in Ariel, among the largest settlements in the West Bank, according to a Defense Ministry statement.

"The minister approved last week the marketing of 277 housing units in Ariel's Noiman neighborhood, of which 100 are intended for evacuees of Netzarim," the statement said, referring to a former Jewish settlement evacuated during Israel's withdrawal from the Gaza Strip in the summer of 2005.

The project is the largest one approved in a single settlement since the establishment of Prime Minister Benjamin Netanyahu's coalition government in March 2009, the Ha'aretz daily reported.

Construction work is scheduled to conclude in 2014, the report said.

Netanyahu's government significantly scaled back on issuing permits for new construction in recent years in light of increasing pressure by the U.S. administration. Some 492 housing were approved in West Bank settlements since 2009.

News of the Ariel project follow reports last week that Interior Minister Eli Yishai has recently given green light on plans to build thousands of new housing units in contentious areas of East Jerusalem, which the Palestinians slate as the capital of their future state.

The Interior Ministry confirmed that Yishai approved the construction of 1,600 housing units in the neighborhoods of Ramat Shlomo, which is located on land seized by Israel during the 1967 Six Day War.

Ministry officials said Yishai's decision to approve the new units was not an attempt to encroach on Arab land, but rather due to the severe lack of land for construction in Jerusalem.

The approval of 930 new housing units on Aug. 4 in Har Homa, a Jerusalem neighborhood adjacent to the West Bank city of Bethlehem, was met with sharp rebuke by the President Barack Obama's administration.

A statement issued by the State Department said the United States was "deeply concerned" by the move, which it views as detrimental to the peace process.

The European Union Foreign Policy chief Catherine Ashton, and chief Palestinian negotiator Saeb Erekat called on Israel to immediately cease all construction activity in East Jerusalem.