The United States on Wednesday said Israel had betrayed its trust by approving plans to build new settlements inside the West Bank, AFP reported. White House spokesperson Josh Earnest said the move will affect both Israel's own security and the prospect of peace in West Asia.

The Israeli government is going ahead with its plan to construct 300 new housing units in the disputed Palestinian territory despite earlier "public assurances" that it would not, Earnest said, calling it a "source of serious concern". The US State Department also "strongly condemned" the move and said Israeli Prime Minister Benjamin Netanyahu had given no warning of the approval, which came after he and US President Barack Obama met at the United Nations.

The approved settlement inside the West Bank will be used to provide shelter to people from Amona, an illegal outpost built on private Palestinian land, according to The New York Times. The Israeli government will initially build 98 houses. The country's Foreign Ministry said the approved units did not represent a "new settlement", and that Israel "remains committed to a solution of two states for two peoples, in which a demilitarised Palestinian state recognises the Jewish state of Israel".

The remarks by both countries come a little over three weeks after the US renewed a defence deal with Israel and promised to provide aid worth $38 billion (approximately Rs 2.53 lakh crore) to the country. The Obama administration will start doling out the money from 2019, after the existing contract expires in 2018. Currently, the US provides $3.1 billion to the Israeli military every year. Obama has emphasised the importance of finding a peaceful solution to the dispute between Israel and Palestine.