Palestinians are upset over announcement that 1,187 new Israeli apartment homes would be built outside the so-called green line, Christian Broadcasting Network reported.

In fact, two-thirds of the apartments are planned for Jerusalem neighborhoods and the others for areas that are expected to stay in Israeli hands even after a final agreement with the Palestinians.

The announcement came shortly before an Israeli ministerial committee approved the release of 26 Arab prisoners incarcerated more than 20 years ago before the Oslo Accords.

The releases are the first of 104 whose life sentences, most for murder, are being commuted as a "goodwill gesture" to Palestinian Authority leader Mahmoud Abbas. The move has angered and upset many Israelis.

Palestinian officials alleged Israel intended the announcement to torpedo the second round of talks, scheduled to begin on Wednesday, Aug 14.

Palestinian negotiator Mohammed Shtayyeh said Israel "aims through this condensed settlement activity to destroy the basis of the solution called for by the international community, which aims to establish a Palestinian state on the 1967 borders," according to Ma'an News Agency.

He called them "conditions and new facts on the ground."

Shtayyeh called on Washington to take "a firm and clear position to rein in this Israeli attack on the West Bank and especially Jerusalem."

Two thirds -- 793 of the apartments are slated for established neighborhoods in Jerusalem. And the other 394 will be built in Israeli towns and cities in what's referred to as "settlement blocks," which are expected to remain part of the Jewish state in any final agreement.

Meanwhile, Obama administration envoy Martin Indyk met with Palestinian officials in Ramallah on Sunday.

As U.S. ambassador to Israel during the Oslo process, under former President Bill Clinton, Indyk worked closely with PLO chairman Yassir Arafat, advocating at that time an Israeli retreat to the pre-1967 borders -- the 1949 armistice lines set up after the War of Independence.