Ehud Barak, Israel’s defence minister, has approved a plan to construct hundreds of new homes in an unauthorised outpost in the Israeli-occupied West Bank, an Israeli rights group said on Tuesday in a report that appeared to defy Washington’s calls for a freeze on settlement growth.

Mr Barak, whose nod is needed for any construction in the West Bank’s Jewish settlements, allowed 240 housing units to be built and 60 existing residences to become legalised in an outpost northwest of the Palestinian city of Ramallah, according to Bimkom, a Jerusalem-based group specialising in planning issues. A spokeswoman for the defence ministry had no immediate comment.

The report may spur further tensions with the administration of Barack Obama, the US president, who has repeatedly urged Israel to stop expanding its settlements on occupied territory that Palestinians want as part of their future state. Benjamin Netanyahu, Israel’s prime minister, has rejected the US demand for a total halt on expansion, though he has pledged not to establish new settlements.

Silvio Berlusconi, Italy’s centre-right prime minister who has cultivated close ties with Israel, told reporters on Tuesday he had urged Mr Netanyahu at the start of his first visit to Europe as prime minister to send ”significant signals about freezing settlements”. An aide to Mr Berlusconi said that he had asked Mr Netanyahu during their talks to make a “concession” on settlements. The aide gave no further details.

Mr Netanyahu did not mention settlements during their joint press conference in Rome, but reporters travelling with the delegation quoted him as saying Israel would not build new settlements or expropriate more land for existing settlements. Bloomberg news agency said he stopped short of saying Israel would freeze settlement expansion on existing land.

Mr Barak approved the plan in April, shortly after Mr Netanyahu’s predominantly right-wing government came to power, and it is likely to receive the final go-ahead in coming months, Bimkom said. The homes are located in Water Reservoir Hill, one of more than 100 so-called wildcat settlements that have been set up without formal state authorisation, though government ministries have often cooperated with their construction.

According to the group, the new homes are meant to “create territorial contiguity” between Water Reservoir Hill and the established Jewish settlement of Talmon, and their building will block residents of a nearby Palestinian village from reaching their agricultural land.

Alon Cohen-Lifshitz, an architect who works with Bimkom, said in a statement: “This proves that Barak has no intention of freezing construction in existing settlements, and not even of refraining from building new ones.”