Prime Minister Benjamin Netanyahu's planned approval of the construction of hundreds of new housing units in West Bank settlements is "unacceptable," Palestinian President Mahmoud Abbas said Friday in Paris.

"What the Israeli government said [about the planned construction] is not useful," Abbas said after a meeting with French President Nicolas Sarkozy. "It is unacceptable for us. We want a freeze on all settlement construction."

Abbas also told journalists that a possible summit meeting with Netanyahu and U.S. President Barack Obama in New York, on the margins of a UN General Assembly meeting, depended on "steps that are taken beforehand regarding a settlement construction freeze."

Abbas said Thursday said he would not meet with Netanyahu until construction in the settlements is halted - a position he has expressed in the past.

The Palestinian president added, after a meeting with French Foreign Minister Bernard Kouchner, that the entire Mideast peace process depended on a freeze of Israeli settlement construction.

"Regarding the peace process, we are prepared to continue the negotiations if Israel stops settlement construction," he said.

Abbas, however, may find himself under pressure to back down from this pledge if Israel and the U.S. work out a deal that allows some Israeli construction.

The majority of members of Fatah, the Palestinian faction that Abbas heads, oppose renewing talks with Israel while it is building in the West Bank. The Palestinians are also seeking a total freeze on construction in East Jerusalem.

Senior Palestinian negotiator Saeb Erekat Palestinian Authority also criticized the move on Friday, saying it would derail any progress in peace negotiations.

"I think the only thing that will be suspended by this announcement is the peace process," said Saeb Erekat.

Earlier Friday, a senior government source had reported that Netanyahu was to approve the construction of hundreds of new housing units in West Bank settlements before he declares a moratorium on building in those locales.

The source from the prime minister's bureau said last night that Netanyahu informed U.S. officials of his decision to authorize the construction a few weeks ago.

The immediate future of construction in West Bank settlements will be determined in talks between Israeli officials and the U.S. Middle East envoy, George Mitchell, who will visit Israel next week. The issue could be decided in Mitchell's two-day visit, which will begin on Thursday, according to the source.

The hundreds of units whose construction Netanyahu is expected to approve will join some 2,500 housing units currently being built, whose construction also will not be halted.

Officials from the prime minister's bureau said Netanyahu "will agree to consider a temporary freeze on construction in the West Bank for a few months after he approves the additional building permits.

In closed talks, Netanyahu has said that he will be prepared to go ahead with the move to promote Obama's peace plan and jump-start stalled peace talks.

"The Americans do not agree with [the approval of new housing units] and are not happy about it, but we put it on the table a long time ago," the source told Haaretz.

The precise length of the moratorium is still subject to debate, and the U.S. and Israel are negotiating on this issue. Netanyahu does not agree to a freeze exceeding a period of six months, while the Americans are insisting on a nine-month period.

In addition, Netanyahu wants to exclude 2,500 housing units on which construction has already started, and the construction of schools and other public structures in the settlements. Israel is demanding that the Palestinian Authority and Arab states make their own concessions in exchange for a freeze.

The moratorium would not apply to East Jerusalem, but Israel would refrain from taking "provocative action" in the framework of the agreement being negotiated with the Americans. A senior source from the U.S. administration who is involved in Mitchell's work told Haaretz Thursday that Israel and the U.S. are close to achieving an understanding on these issues.

The source added that several Arab states have pledged gestures toward Israel, including opening Israeli diplomatic missions in their territory, holding senior-level meetings between Arab leaders and Israeli counterparts, holding direct telephone conversations between leaders of Arab states and Israeli leaders, and El Al flights to Arab airports.

These concessions apparently include granting permission to Israeli civilian planes to fly through the airspace of several Arab states. Each Arab country has pledged a different gesture toward Israel, the American source said.

"A deal with Israel on the issue of construction in the settlements is crucial," the source added. "Netanyahu's actions will determine the future of his relationship with President Obama, so this is a crucial trial."

Eitan: Likud must unite behind Netanyahu

Likud MK Michael Eitan called on his fellow party members to remain united behind Netanyahu's leadership as "past experience conclusively proves that any divisions, acts of rebellion or splintering have brought on the demise of the national camp."

Moreover, Eitan said, the demise of a government supporting West Bank settlements, also brought on the "rise of an administration interested in its eradication."

Eitan added that while an "open democratic debate on this important issue is legitimate and important, but eventually, under current circumstances and international constraints, only a united Likud led by Netanyahu can steer Israel's policy in the best way for its people."

The Yesha Council of Settlements said it wished to remond the public that "Netanyahu had pledged to the Israeli voter to return building in Samaria and Judea to a path of development."

"Several hundred housing units, even if they were to be approved, do not change the fact that a settlement freeze will cause far-reaching political damage," the Yesha council said, adding that "when the roar of the festivals dies down, all that is left is a freeze of settlement construction, one brought on by a prime minister from the national camp."

Ophir Pines-Paz, a dovish lawmaker whose Labor Party is part of Netanyahu's coalition, said Friday that issuing new building permits was unnecessary and damaging.

"I fear that issuing new permits will foil the next step - a settlement freeze that would build confidence and allow negotiations to resume," he said.