JERUSALEM, Aug 15 (Ori Lewis/Reuters) - Israel announced on Monday approval for building 277 homes in a West Bank settlement, despite U.S. and international pressure to curb expansion on occupied land and as Palestinians prepare for a statehood bid at the United Nations.

Four days after a final go-ahead for a plan to build 1,600 settler homes in East Jerusalem drew U.S. and European condemnation, Defence Minister Ehud Barak's office said he had signed off on new housing in the major settlement of Ariel.

Ariel Mayor Ron Nachman told Reuters the project was the largest approved by the government in the settlement for years.

No more than 50 apartments have been built here in the past seven years, Nachman said.

Ariel, which has some 18,000 inhabitants, is one of the largest settlements Israel has built in the West Bank, territory captured in a 1967 war and which Palestinians want back along with the Gaza Strip for a future state.

Prime Minister Benjamin Netanyahu has named Ariel as one of the large settlements that Israel intends to keep in any peace deal with the Palestinians.

U.S.-brokered peace talks have been frozen since the Palestinians walked out in September over Israeli settlement building.

In the absence of negotiations, they have said they would apply at the United Nations next month for full membership in the world body as part of a campaign to win international endorsement of sovereignty in the West Bank and Gaza Strip.

Israel and the United States oppose the unilateral move, and have called on Palestinian President Mahmoud Abbas to return to the talks.

A single-sentence statement issued by the Defence Ministry said 100 of the 277 homes to be built in Ariel were intended for Israeli settlers evacuated from the Gaza Strip in 2005.

Nachman said construction should be completed within three years.

Nabil Abu Rdainah, spokesman for Abbas, told Reuters: This act is condemned and is an Israeli attempt to obstruct and destroy what is left of any effort to revive the peace process.

Once again, these Israeli settlement measures represent a strong reason calling on us to go to the United Nations and the Security Council to request membership for the State of Palestine and to halt these Israeli measures, he said.

On Thursday, the U.S. State Department voiced concern over final approval given for the construction of 1,600 housing units in Ramat Shlomo, a religious Jewish settlement in an area of the West Bank annexed to Jerusalem by Israel.

A State Department spokeswoman said such unilateral action undercuts trust and works against U.S. efforts to get Israel and the Palestinians back to the negotiating table.

Yariv Oppenheimer, a spokesman for Peace Now, an anti-settlement Israeli advocacy group, called the Ariel project a very negative move that shows the Israeli government has no intention to speak to the Palestinians but wants to confront them and the international community.

Israel disputes Palestinian claims to all of the West Bank, saying a return to pre-1967 war borders would jeopardise Israeli security and citing historical links to an area the government calls by its biblical name, Judea and Samaria.

Some 500,000 Jews live in the West Bank and East Jerusalem, also captured in the 1967 conflict. There are about 2.5 million Palestinians in the same territory. (Editing by Jeffrey Heller and Louise Ireland)