Washington  - US Secretary of State Hillary Rodham Clinton said Israel's plan to expand settlements in the West Bank was regretful and "inconsistent" with the international peace plan designed to resolve the Israeli-Palestinian conflict.

"We regret the reports of Israel's plans to approve additional settlement construction," Clinton said in a statement. "Continued settlement activity is inconsistent with Israel's commitment under the roadmap" peace plan.

An Israeli official confirmed Friday that Prime Minister Benjamin Netanyahu was set to approve plans for the construction of hundreds of new apartments in West Bank settlements. The move is a precursor to accepting US and Palestinian demands for a temporary freeze in settlement expansion.

The rare public disagreement between US President Barack Obama's administration and Netanyahu's government is indicative of the widening rift between the two sides as Obama lists an Israeli- Palestinian peace deal among his highest foreign policy priorities.

"As the president has said before, the United States does not accept the legitimacy of continued settlement expansion and we urge that it stop," Clinton said. "We are working to create a climate in which negotiations can take place, and such actions make it harder to create such a climate."

Netanyahu's plan is seen, however, as a way of calming opposition within his own Likud party, and among other hardliners, to a freeze of construction in Jewish settlements ahead of peace negotiations with Palestinians.

An Israeli official said that Israeli and US representatives are close to reaching a deal on a settlement freeze that would allow Obama to host a three-way summit, possibly at the United Nations September 23 or 24, and announce the relaunching of the peace process.

The sides hope to finalize the deal when Obama's special envoy to the Middle East, George Mitchell, visits the region next week.

Netanyahu's reported plan drew sharp criticism from the Palestinians. Palestinian President Mahmoud Abbas, in Paris to meet with French President Nicolas Sarkozy, called the expansion "unacceptable."  dpa