Israeli government sources said Thursday they were shocked by the international community’s condemnation of new settlement tenders, and contrasted this criticism with what they termed the untenable international readiness to work with the new Hamas-backed Palestinian unity government.

“It is mystifying that in the international community there are those who say that a Palestinian government which has a murderous terrorist organization as a member can advance peace,” the Israeli sources said, “while at the same time there are those in the international community who claim that construction in Jerusalem, the capital of Israel, and in other places that the Palestinians know will remain under Israeli sovereignty in any future arrangement is a step that we must reverse,”

The European Union said Thursday it was “deeply disappointed” over an Israeli announcement to commence construction of thousands of new units in the West Bank and East Jerusalem, and called on the government to “reverse this decision.”

The EU also alluded to resolutions to sanction Israel for its settlement activity and vowed to “fully and effectively implement” them.

Just before the EU condemnation, and hours after issuing tenders for 1,500 housing units, the Israeli government ordered officials to move forward with plans for an additional 1,800 settlement homes. The statement from the EU condemned 1,466 approved units, but did not address the later notice.

The settlement move, which drew fierce condemnation from Palestinians and from the US ambassador to Israel, is seen as a response to the swearing in this week of a Hamas-backed Palestinian unity government that has been denounced by Israel but recognized by the US and EU, among others.

Also Thursday, a State Department spokeswoman said that the United States is “deeply disappointed” by Israel’s plan to issue new building tenders in the West Bank and East Jerusalem, but will not call on Israel to reverse its decision..

The statement from the European Union accused Israel of threatening the peace process, which was suspended by Israel in April in response to the announcement of the Palestinian unity government.

“The EU and its Member States have repeatedly called on all sides – most recently in May – to exercise maximum restraint and to avoid any unilateral action which may further undermine peace efforts and the viability of a two-state-solution, such as continued settlement expansion,” it said.

“What is needed right now is constructive engagement, in order to create a climate conducive to resumed negotiations,” the statement added. “We call on the Israeli authorities to reverse this decision and to direct all their efforts toward an early resumption of the peace talks.”

Israel’s Housing and Construction Ministry on Wednesday published tenders for 1,500 units in the West Bank and East Jerusalem in a move Minister Uri Ariel said was a response to the “Palestinian terror government” established earlier this week.

Of the housing projects approved by Ariel’s ministry, over 700 are slated for the Etzion Bloc towns of Efrat and Beitar Illit, another 76 are planned in the town of Ariel, 78 in Alfei Menashe, 155 in Givat Ze’ev, and 400 in the northern Jerusalem neighborhood of Ramat Shlomo. An additional 38 are to be built outside what’s considered the major West Bank settlements blocs, in the West Bank settlement of Geva Binyamin, north of Jerusalem.

AFP and Marissa Newman contributed to this report.