Israel has approved 600 new housing units for the West Bank's biggest Jewish colony despite an understanding with Washington not to expand enclaves on occupied land, political sources said yesterday.

But no building tenders have been published since the decision two months ago and security sources said the United States, Israel's main ally and key mediator in its conflict with Palestinians, would be consulted before construction began.

The plan would add homes to Maale Adumim, a suburban-style colony with 30,000 people. Located just east of Jerusalem, it straddles the mid-section of territory Palestinians seek for a viable independent state under a U.S.-led peace "road map".

Washington, which has Israel's pledge not to build beyond existing zones in West Bank colonys, voiced reservations.

"Israel has made a commitment," U.S. State Department spokesman Adam Ereli said. "We look forward to Israel abiding by that commitment and sticking by the road map."

Palestinians accused Israel of poor faith in peacemaking.

"This is in total defiance of the road map ... and total defiance of (U.S.) President (George W.) Bush's vision. colonys and peace do not go together," Palestinian Negotiations Minister Saeb Erekat said.

"We will discuss this new neighbourhood with the Americans," said an Israeli security official of the decision, acknowledged by a Defence Ministry spokesman without further comment.

The Bush administration has already expressed dismay at the Israeli government's failure to tear down dozens of unauthorised colony outposts erected during Prime Minister Ariel Sharon's tenure since 2001.

Israeli officials say legal actions filed by settlers have bogged down attempts to remove outposts.

In April, Bush assured Sharon that Israel could retain some West Bank land under any future peace deal with Palestinians if the Israeli premier carried out his unilateral plan to withdraw from the Gaza Strip - another occupied territory - next year.

The year-old road map, which also requires a halt to Palestinian militant attacks on Israelis, has been stymied by persistent violence on both sides.

Sharon's blueprint to "disengage" from a bloody stalemate with Palestinians would evacuate all 8,000 Jews from Gaza, along with four of 120 colonys in the West Bank.

But "disengagement" also entails keeping some West Bank colony blocs, including Maale Adumim, with the bulk of the 240,000 Jews on land Israel took in the 1967 Middle East war.

Palestinians, in revolt for almost four years, see the right-wing Sharon's "disengagement", along with a vast Israeli security barrier going up in the West Bank, as a ruse to dismember territory that would be heart of the state they seek.

"The security fence is not going back to the 1967 lines," Israeli Defence Minister Shaul Mofaz said of the barrier.

Political sources said the 600 new homes would extend Maale Adumim eastwards, which could rupture direct trade and transport routes between the northern and southern West Bank.