"After consultations in the prime minister's office, the immediate construction of 300 homes in Beit El has been authorized," a statement from Netanyahu's office said, adding that planning for another 504 homes in annexed East Jerusalem had also been approved.
According to the statement, the 300 units in the West Bank had been promised three years ago following the demolition of other homes in the Beit El settlement, AFP reported.
The prime minister holds only a one-seat majority in parliament following March elections and settler groups wield significant influence in his right-wing cabinet.
Israeli settlements in the occupied West Bank are considered illegal under international law, though not by Israel.