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The measure was approved by the government on Sunday as U.S. Assistant Secretary of State Barbara Leaf, who is in charge of Middle East affairs, was set to meet with Israeli and Palestinian leaders during a weeklong visit to the region.

The U.S. Statement Department later issued a statement expressing concern over Israel's action. “As has been longstanding policy, the United States opposes such unilateral actions that make a two-state solution more difficult to achieve and are an obstacle to peace,� spokesman Matthew Miller said.

The Palestinian Foreign Ministry condemned the Israeli government’s decision and called upon the international community to pressure Israel “to take the necessary practical steps to force the Israeli government to stop its illegal unilateral measures.�

The government gave Finance Minister Bezalel Smotrich control over planning in West Bank settlements, a condition he had made to join the government. The authority over planning in the territory, which is under a 56-year military occupation, is traditionally the purview of the country's defense minister. Smotrich is also a minister within the Defense Ministry.

The decision also removes the need for approvals from the political echelon throughout the planning process, requiring only one initial approval. Critics say that not only normalizes construction in the West Bank, making it nearly as simple as building anywhere in Israel proper. They also say it lifts government oversight over sensitive building plans that can spark international outrage.

A senior Israeli government official said the move will cut red tape and make planning approvals “an effective two-step process."

“The decision concerning authorization of construction in Judea and Samaria is still made at the Ministry of Defense and remains subject to the Prime Minister’s authorization,� the official said, speaking on condition of anonymity.

Israel's Peace Now anti-settlement watchdog group criticized the decision for “disregarding security and political considerations and perpetuating de facto annexation in the West Bank.� The change comes as an Israeli planning committee said it was planning to bring for approval some 4,500 West Bank housing units when it meets next week.

Israel captured the West Bank in the 1967 Mideast war and in the decades since has built dozens of settlements that are now home to more than 500,000 Jewish settlers living alongside around 2.5 million Palestinians. Most of the international community considers the settlements illegal under international law and an obstacle to peace with the Palestinians.

The Palestinians seek the territory, along with the Gaza Strip and east Jerusalem, for a future independent state.

Hussein al-Sheikh, a top Palestinian leader, said the Palestinian AUthority would boycott a joint economic meeting that was scheduled for Monday.