The Netanyahu government hasn't wasted any time issuing a response to yesterday's vote at the UN. The announcement that Israel plans to build in the E1 corridor is especially meaningful, because many see this stretch of land as the last hope for a contiguous Palestinian state under a two-state solution. This has been part of Netanyahu and Avigdor Lieberman's plan since the beginning of their political partnership.

From Ynet:

Israel decided Thursday to approve the construction of an additional 3,000 housing units in Jerusalem and the West Bank.

In addition, the planning procedures of thousands of additional housing units in Jerusalem and the settlement blocs will be furthered, including in the segment connecting Ma'ale Adumim with Jerusalem, known as the E1 project.

State officials said Israel was considering further moves in response to the United Nations General Assembly's recognition of Palestine as an observer state.

The decision was made by the government's top nine ministers. A state official said the continuation of construction was done in accordance with the map of Israel's strategic interests.

On the eve of the UN vote, the political echelon had planned to practice restraint over the Palestinian move, particularly so as not to make the world turn on Israel, but state officials said that in light of the talk of a diplomatic failure and the fact that the country is in the midst of an election campaign, Prime Minister Benjamin Netanyahu found it difficult to avoid a significant response.

Eventually, the prime minister decided to order a massive construction boom in settlements and Jerusalem neighborhoods located beyond the Green Line.

In earlier discussions on the proper Israeli response to the move, senior sources warned that a decision to build in the settlements would be interpreted by the international community as a measure of punishment against the Palestinians.

They suggested that Netanyahu wait so that the UN vote would not be linked to the decision to build in the settlements, but Netanyahu chose to respond immediately rather than wait.

Haaretz adds:

In the beginning of his term, Prime Minister Benjamin Netanyahu gave the Obama administration a commitment that Israel would not build in the area. Both of his predecessors, Ariel Sharon and Ehud Olmert, also promised the U.S. administration that Israel would not build in E1.

Former US Ambassador to Israel Daniel Kurtzer told Al-Monitor's Laura Rozen, “If the announcement is real and not simply a PR move for internal politics reasons, it should spur the Administration into action, as the United States has been adamant for many years, including in the Bush Administration, that Israel not build in E-1.”