On Sunday, Trump explained why he had not fulfilled his election promise to move the United States embassy from Tel Aviv to Jerusalem, saying he wanted to give peace between Israel and Palestine "a shot" before moving forward with his pledge.
The march comes at a time when many analysts see little hope for an Israeli-Palestinian peace deal.
Trump has backed away from the campaign pledge on the embassy move as his Mideast envoy attempts to breathe life into peace talks, which last collapsed in 2014 under U.S. tutelage.
Jerusalem Affairs Minister Ze'ev Elkin said he was saddened by Trump's decision, especially since Palestinian Authority President Mahmoud Abbas is not a true partner for peace.
According to the Hebrew-language Channel 2 news TV, Netanyahu will give the Civil Administration, the body in charge of giving building permits in the West Bank, a green light to approve the new construction.
Israel occupied East Jerusalem - in which the Al-Aqsa is located - during the 1967 Middle East War.
It was not immediately clear how numerous homes would be new projects, in contrast to previously announced projects moving forward in the building process. The plan - which now needs to be ratified by the committee before construction tenders are announced - was partially welcomed by the council of settlers: local ones were more in favor while Ynet reported that Yossi Dagan, council head of Judea and Samaria (West Bank), opposed it.
Quds Press said that Ariel delivered his remarks during a celebration of the 40th anniversary of establishing the illegal settlement of Karni Shamron on the Palestinian land of Qalqilya. Israel disputes this, saying the fate of the settlements should be decided in negotiations.
Trump has called making peace between Israel and the Palestinians the "ultimate deal".
After getting into the Oval Office, Trump said he'd study the issue.
However, the official continued, "at the same time the administration recognizes that past demands for a settlement freeze have not helped advance peace talks". A total of 3,829 housing units are expected to be approved in areas where construction was on hold for 40 years.
Meanwhile, incitement to violence by both Palestinian factions continues. In a statement, Prime Minister Rami Hamdallah urged the global community "to compel Israel to stop settlement activity".