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President Trump brokers the historic agreement. The United Arab Emirates and Israel will move toward bilateral diplomatic relations, and Israel will suspend plans to annex portions of the West Bank.
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The Trump Mideast plan would recognize Israeli sovereignty over land Palestinians want for a future state, but the administration urged Israel to hold off.
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The prime minister's move appears to be aimed at galvanizing support among his nationalist base and right-wing political allies before Tuesday's election.
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This is the second announcement of construction plans this week. President Trump, who took office on Friday, is widely expected to be more supportive of settlement expansion than his predecessor.
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West Bank settlements have expanded under every Israeli government over the past half-century. Nearly 10 percent of Israel's Jewish population now lives on land captured in the 1967 Six-Day War.