Defense Minister Ehud Barak will approve by Monday evening construction of 500 new housing units in settlements in Judea and Samaria, Defense Ministry officials confirmed on Sunday evening.
This approval will come prior to the government's expected declaration of a settlement moratorium, part of a package the US administration is trying to put together to relaunch the diplomatic process.
Although the Defense Ministry did not say where the homes would be built, the assumption is that most would be in the large settlement blocs - Modi'in Illit, Ma'aleh Adumim and Gush Etzion.
Information and Diaspora Affairs Minister Yuli Edelstein said that Prime Minister Binyamin Netanyahu had told him that some of these units, however, would be built in settlements outside the large blocs.
Ma'aleh Adumim Mayor Benny Kashriel told The Jerusalem Post that as of Sunday night he had not been notified of any new construction permits for his city.
But even if he had, he said, he opposed any plan that involved a freeze on new construction permits.
It would be preferable, he said, to build while negotiating with the Palestinians than to hold such talks while there was a freeze. Kashriel plans to go ahead Monday with a planned protest rally on the undeveloped E-1 site within in his city, on which the government has refused to authorize construction.
Protesters led by Kashriel plan to bury a scroll inside a jar on the hilltop as part of a symbolic cornerstone laying ceremony.
The Prime Minister's Office denied reports that US Mideast envoy George Mitchell had decided to postpone his trip to Israel as a protest over the move. Mitchell was originally expected to arrive this Thursday.
One senior official in the Prime Minister's Office said that the visit was going ahead as planned, and that if there was a postponement of a day or two, it was for "logistical reasons."
The settlement issue did not come up at Sunday's weekly cabinet meeting, and cabinet secretary Zvi Hauser said the matter would be brought to the full cabinet when the picture became clearer. At the same time, Hauser said the coalition's faction heads had all been apprised of the situation and that the move was coordinated with them.
The plan was reportedly approved by the six-member inner cabinet last month.
Barak's authorization of an additional 500 housing units would be the first such approval for new construction in the settlements since November 2008, according to sources in the Prime Minister's Office.
Dani Dayan, who heads the Council of Jewish Communities of Judea, Samaria and the Gaza Strip, said that only a fraction of the settlements would benefit from the new permits, so that for most of them, a freeze on new construction was already a reality.
At present, 2,500 apartments are under construction in the settlements, most of them in Modi'in Illit, Betar Illit, Ma'aleh Adumim and Givat Ze'ev.
While the authorization of the new homes seems to be a done deal, Israel's agreement to a moratorium still has to be worked out, and would be among the issues to be discussed when Mitchell arrives.
The depth of the moratorium, government officials told the Post, would be dependent on what normalization steps Arab countries were willing to bring to the table.
"There are many outstanding moving parts that are all interconnected," one official said on Sunday. Despite criticism that came out of Washington on Friday, the officials said that Israel had been "very transparent" with the US about this matter.
Barak, meanwhile, said at a gathering of bereaved parents in Herzliya that Israel was on the cusp of a "sensitive and important" period.
"The security challenges have not disappeared, and we must be ready for any threat to the vital security interests of the state, but we are also on the eve of diplomatic decisions," he said.
Barak said Israel should support with "an open heart" the American initiative for a comprehensive agreement in the Middle East.
"That agreement includes components of normalization with moderate forces in the Arab world that will give support to a significant diplomatic process with the Palestinians, and, I hope, also in the future [to a process] with the Syrians."
The defense minister said it would be possible to overcome disagreements with the Americans, and to move forward with a "significant diplomatic process that will lead to two states for two peoples."
Barak will reportedly join Netanyahu and Foreign Ministry Avigdor Lieberman at the UN General Assembly meeting in New York in two weeks, where Netanyahu is widely expected to meet with both US President Barack Obama and Palestinian Authority President Mahmoud Abbas.
Tovah Lazaroff and Gil Hoffman contributed to this story.