JERUSALEM - Israeli authorities Tuesday announced the approval of 942 new settler homes in annexed east Jerusalem, sparking Palestinian fury on the eve of the resumption of fragile peace talks with Israel.

The Jerusalem municipality said that while it had only now given final approval for the new homes in Gilo, an existing settlement in east Jerusalem, they had been a long time in the planning.

But senior PLO official Yasser Abed Rabbo said the announcement, coupled with the weekend approval of around 1,200 homes to be built elsewhere in east Jerusalem and in the West Bank, threatened the “collapse” of talks.

“This settlement expansion is unprecedented,” Abed Rabbo said. “It threatens to make talks fail even before they’ve started.”

Israel meanwhile was preparing to release 26 veteran Palestinian prisoners ahead of Wednesday’s talks, reportedly to begin in the early hours of the morning.

Israeli public radio said that the 26 had been moved to Ayalon prison, in Ramle near Tel Aviv, where they had undergone “security checks” prior to their release.

The radio said that police and prisons service vehicles were rehearsing their route from Ramle to the West Bank crossing near Ramallah where they are to be handed over to Palestinian authorities.

The remaining 78 prisoners will be freed in batches depending on progress in talks. A last-minute appeal against their release by families of victims was rejected Tuesday by the Supreme Court, which said prisoner releases were political decisions for the government alone to take, court documents said.

US Secretary of State John Kerry during a visit to Colombia on Monday urged the Palestinians “not to react adversely” to the weekend Israeli settlement announcement. Kerry, who took the lead in securing last month’s resumption of peace talks after a three-year hiatus, stressed the need for the two sides to return to the negotiating table as planned on Wednesday in Jerusalem.

The city’s deputy mayor Yosef Pepe Alalu told AFP the municipality had approved a construction plan for 942 homes in Gilo. “This is a terrible decision which is a provocation against the Palestinians, the Americans and the whole world who oppose continued settlement building,” the leftwing municipal councillor said.

A Tuesday municipality statement confirmed the homes’ approval but said they had been planned for a long time.

“The authorisation (was) granted yesterday,” the statement from Mayor Nir Barakat’s office said.

But “the housing development in the Jerusalem neighbourhood of Gilo was previously announced over two years ago.”

Israel’s housing ministry on Sunday announced tenders for the construction of 793 settlement housing units in annexed east Jerusalem and 394 elsewhere in the West Bank.

“Settlement expansion goes against the US administration’s pledges and threatens to cause the negotiations’ collapse,” said Abed Rabbo.

Palestinian officials had already reacted angrily to Sunday’s announcement.

“Israel is attempting to prevent negotiations from taking place on Wednesday,” negotiator Mohammad Shtayyeh said at that time.

Meanwhile, Palestinian president Mahmud Abbas has asked caretaker prime minister Rami Hamdallah to stay on, tasking him on Tuesday with forming a new government, a spokesman said.

“Abbas on Tuesday met head of the caretaker government Rami Hamdallah and tasked him again with forming a government,” the Palestinians’ Wafa news agency quoted Abbas spokesman Nabil Abu Rudeina as saying.

Hamdallah’s office said in a statement he had accepted the task and would form a new government within five weeks.

Abbas accepted Hamdallah’s resignation on June 23 after barely two weeks on the job, but asked him to stay on on a caretaker basis until a new premier could be appointed.

Meanwhile, Israel intercepted and destroyed a rocket fired from Egyptian territory at the Red Sea town of Eilat overnight, Israeli public radio said Tuesday.

A group had earlier said they fired a Grad rocket at Eilat in retaliation for an alleged Israeli air raid. An army spokeswoman confirmed the attempted rocket attack and its interception by an Iron Dome battery near Eilat to AFP, but did not say where the rocket originated.

The rocket, fired from the Sinai, was “a quick response to the last crime by the Jews after one of their drones bombed the Sinai peninsula killing four mujahedeen” on Friday, the statement said.