The Russian foreign ministry said Moscow was "seriously concerned" by the move.

"The announcement of such plans on the eve of a new round of negotiations due to be held in al-Quds on August 14 ... is a counterproductive step that complicates the atmosphere of the talks," the Russian ministry statement said.

In a decision that infuriated the Palestinians, Israel's housing ministry said on Sunday it would be publishing tenders for 793 units in east al-Quds and 394 elsewhere in the West Bank.

The US State Department said last week that Israeli and Palestinian US-led negotiators would resume talks in al-Quds on Wednesday on ending their decades-old conflict.

The sides allegedly returned to negotiations in Washington last month, while the main Palestinian political parties have already boycotted such talks which do not involve all Palestinian groups.

The last talks in 2010 broke down over the issue of illegal settlement building.

NJF/NJF