The interior ministry confirmed the new construction, amid reports that Mr Netanyahu had turned down a direct request from Washington's envoy, George Mitchell, to halt the programme.
The Israelis claim that the settlement, Gilo, is now part of Jerusalem, which it has always said would not be included in any freeze that might be agreed to facilitate talks.
Gilo already houses 40,000 Israelis.
Israel approves 900 more settler homes
Blast 'hits Peshawar security HQ'
Army spokesman Major Murad Khan told Deutsche Presse-Agentur dpa that a suicide bomber rammed an explosives-laden vehicle into security forces' headquarters located in Madyan area of restive Swat valley in North West Frontier Province. Six soldiers were also injured in the bombing, he added.
Earlier, thousands of people protested the killing of three civilians allegedly by army shelling.
The demonstration started after a mortar round hit a house in the Allah Abad area of Swat district, leaving a women and her two children dead, local journalist Nisar Ali Khan said.
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Feds move to seize assets allegedly held by Iranian government
Federal prosecutors Thursday moved to seize U.S. assets allegedly held by the government of Iran, including a mosque and school in the Potomac area, land in Prince William County and a 36-story Manhattan office building.
The U.S. attorney in Manhattan filed a civil complaint in federal court seeking the forfeiture of more than $500 million in assets of the Alavi Foundation and another alleged front company. The complaint also targets mosques in California, New York and Texas.
Police in £9m scheme to log 'domestic extremists'
Israel push to change laws of war
The order from Binyamin Netanyahu follows a special cabinet meeting on Tuesday to discuss Israel's response to the UN's Goldstone report, which condemned Israel's actions during the 22-day war on Gaza earlier this year. The meeting also called for the formation of a special committee to deal with the international legal consequences of the report and the prospect Israeli officials could face war crimes trials abroad.
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12th graders tell Netanyahu: We refuse to serve in IDF
Dozens of graduating high school seniors signed a letter on Monday declaring their refusal to enlist in the Israel Defense Forces.
The missive, which was addressed to Prime Minister Benjamin Netanyahu, Defense Minister Ehud Barak, and IDF Chief of Staff Gabi Ashkenazi, stated that the reason for their refusal to serve stems from the belief that "there is no military solution to the Israeli-Palestinian conflict." "We hereby announce our refusal to take part in the military apparatus," read the letter which was signed by 88 youths. "We do not see a military solution as the proper solution to the Israeli-Palestinian conflict."
You have blood on your hands, Blair told
The former Prime Minister Tony Blair was told today he had "blood on his hands" by a bereaved father at a reception following a memorial service for those killed in Iraq.
Peter Brierley, whose son Lance Corporal Shaun Brierley, 28, was killed in March 2003, refused to shake Mr Blair's proffered hand and said: "I'm not shaking your hand, you've got blood on it." The former prime minister was ushered away and afterwards Mr Brierley, from Batley, West Yorkshire, said: "I understand soldiers go to war and die but they have to go to war for a good reason and be properly equipped to fight."
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