The United Nations and European Union have criticised an Israeli plan to build 1,250 homes for Jewish settlers on the edge of occupied East Jerusalem.
Israel has invited bids for the construction in the Givat Hamatos area.
A UN envoy warned it would damage prospects for a future contiguous Palestinian state.
Under President Trump the US has taken a permissive approach to settlement activity, but President-elect Joe Biden is expected to change that.
European diplomats who visited the area on Monday to protest against the plan were heckled by Israeli nationalists.
A video posted by Israeli public broadcaster Kann showed a crowd shouting "shame on you" at the diplomats, and accusing them of anti-Semitism and supporting terrorism.
#BREAKING: @EUpalestinians representatives that arrived to protest the building of 1000+ home Givat Hamatos in East Jerusalem have been chased out of the area after activists protested their arrival (video @SuleimanMas1) pic.twitter.com/7NpIa1BBo7— Amichai Stein (@AmichaiStein1) November 16, 2020
Anti-settlement groups meanwhile said they believed Israeli officials were hurrying through the project before President-elect Biden took office.
More than 600,000 Jews live in about 140 settlements built since Israel's occupation of the West Bank and East Jerusalem in the 1967 Middle East war.
Most of the international community considers the settlements illegal under international law, though Israel disputes this.
The plan for the construction of 1,257 housing units in Givat Hamatos was revived Israeli Prime Minister Benjamin Netanyahu in February, having previously been frozen for years because of international opposition.
On Sunday, the Israel Land Authority (ILA) asked building contractors to submit bids by 18 January.
The UN Special Co-ordinator for the Middle East Peace Process, Nickolay Mladenov, said he was "very concerned" by the step and called for it to be reversed.
"If built, it would further consolidate a ring of settlements between Jerusalem and Bethlehem in the occupied West Bank.
"It would significantly damage prospects for a future contiguous Palestinian State and for achieving a negotiated two-state solution based on the 1967 lines, with Jerusalem as the capital of both states," he added.
EU foreign policy chief Josep Borrell said he was "deeply worried".
Deeply worried by Israel's decision to open tenders for new settlement at Givat Hamatos.— Josep Borrell Fontelles (@JosepBorrellF) November 15, 2020
Building will seriously damage prospects for a two-state solution in line with international law. We call on Israel to reverse this negative step.
My Statement on settlement expansion 👇 https://t.co/Od8272MshF
Nabil Abu Rudeineh, a spokesman for Palestinian Authority President Mahmoud Abbas, said the tender was part of Israeli efforts "to kill the internationally-backed two-state solution" - the concept of a Palestinian state alongside Israel long touted as formula for resolving the Israel-Palestinian conflict.
Israeli anti-settlement group Peace Now noted that the Israel Land Authority's deadline for bids was two days before Mr Biden's inauguration.
It accused Mr Netanyahu's government of "taking advantage of the final weeks of the Trump administration in order to set facts on the ground that will be exceedingly hard to undo in order to achieve peace".
Under President Donald Trump, the US shifted its position on settlements in the West Bank, declaring a year ago that they were "not, per se, inconsistent with international law".
Mr Biden is expected to reverse that, but he has said he will not undo Mr Trump's decision in 2017 to recognise of Jerusalem as Israel's capital.
The outgoing president released a peace plan this January that the Palestinians said was biased towards Israel and gave it the green light to annex parts of the West Bank.
The invitation of tenders for Givat Hamatos was published days before a visit to Israel by US Secretary of State Mike Pompeo.
Israeli media reported that Mr Pompeo was expected become the first secretary of state to visit a settlement in the West Bank - a move the Palestinian prime minister said would set a "dangerous precedent".
The state department has not yet confirmed his itinerary.