Israel's prime minister is defending plans to build hundreds of new housing units in areas Palestinians demand for their future state.

Benjamin Netanyahu's remarks came ahead of a visit later this week by U.S. Secretary of State John Kerry, who is mediating Israeli-Palestinian talks. An Israeli official said Netanyahu spoke at a meeting with members of his Likud party on Sunday.

The official quoted the prime minister as saying during the meeting that "the Palestinians knew we would build in the course of the negotiations" and that they seek to create "an artificial crisis."

The official, who attended the meeting, spoke Monday on condition of anonymity because he wasn't allowed to discuss the issue.

Palestinians were angered by Israel marketing the 1,500 housing units it announced last week.