JERUSALEM - Israel's Defense Ministry has recently approved the construction of 294 homes in the West Bank city of Beitar Illit, The Jerusalem Post said Monday.

The report comes amid what many local pundits view as a looming crisis in the Israeli-US relations over the terms of concessions that Israel would have to make in a future peace deal with the Palestinians.

The revelation over the construction project came Sunday in a report about the settlement activity published by Israeli left- wing NGO Peace Now.

The housing approval for the ultra-orthodox Jewish community, which is the second largest Israeli city in the West Bank, was granted in late April, according to the group.

The Peace Now report also listed additional construction projects currently planned for the West Bank settlements, including an old age home and a commercial center in nearby Efrat, a 9,000-resident community and the largest town in the Gush Etzion settlement bloc.

The building permits awarded to Efrat's local council were the first in a decade.

In March, the defense ministry greenlighted the construction of 390 housing units in the West Bank.

While Israeli Prime Minister Benjamin Netanyahu is in Washington on a visit that will conclude with a long-anticipated speech before a joint session of Congress on Tuesday, Israel's Deputy Foreign Minister Danny Ayalon on Sunday called on the government to approve more construction.

During a visit to the West Bank city of Ma'ale Adumim, located just east of Jerusalem, Ayalon declared that the future of the 30, 000-resident community is "the same as that of Jerusalem and the State of Israel."

US-brokered peace talks between Israel and the Palestinians broke down soon after being launched last September, following both a Palestinian refusal to accept the Israeli demands over a recognition of Israel as the "national home of the Jewish People" and Israel's refusal to extend a self-imposed 10-month freeze on the West Bank settlement construction.

Since then, the Palestinians have been steadfastly insisting that Israel must cease all construction activity in the West Bank and east Jerusalem as a precondition for the renewal of the peace process.