The news was announced by an unnamed Israeli official Wednesday, days ahead of U.S. President Donald Trump’s son-in-law Jared Kushner is scheduled to visit Israel.
He is visiting the country to explore prospects for his Israeli-Palestinian peace plan. Details of the plan remain vague, however.
The Palestinian leadership has rejected U.S. diplomacy, saying the Trump administration is biased toward Israel.
Israeli Prime Minister Benjamin Netanyahu, a conservative who is drumming up ultra-nationalist Jewish support ahead of a Sept. 17 election, has hinted that Israel could annex its West Bank settlements - in defiance of world powers that view the enclaves as illegal.
The approvals were given for the West Bank under Area C which according to the 1993 Oslo interim peace accords is fully controlled by Israeli security and citizens.
According to Israel, about 450,000 settlers and 250,000-290,000 Palestinians live in Area C. A total of about 3 million Palestinians live throughout the West Bank.
Saying it rejected any Israeli construction or controls over Palestinian construction in the West Bank, the Palestinian leadership dismissed the housing announcement.
The Foreign Ministry in Ramallah called it “evidence of the dark colonial mentality of the rules in Israel and which ignores all United Nations resolutions, international law, and the signed agreements”.
The U.S. ambassador to Israel, David Friedman, said, however, the permits for the Palestinians were the first for some time.
“We spend lots of time speaking with the Israelis about improving conditions in the West Bank and Gaza,” he told CNN.
Friedman sidestepped questions about whether the Trump administration foresaw a Palestinian state or Israeli annexations of West Bank land.
“Israel has not presented to us any plan to retain or annex any portion of the West Bank and we have no view on it at all right now,” Friedman added.
Following a previous announcement on new settler houses in April, the European Union reiterated that all settlement activity was illegal under international law. It eroded the viability of a two-state solution and the prospects for lasting peace, the EU said.