Jerusalem ? Israeli Cabinet ministers approved a plan to expand settlements on the occupied Golan Heights, a move that angered Syria and could jeopardize nascent efforts to resume peace talks.

Syria denounced the $56 million project, which aims to bring 900 more Israeli families to the strategic plateau, currently home to around 18,000 Israelis.

The plan “blocks the road to any effort or initiative toward achieving a just and comprehensive peace in the region,” a Syrian government spokesman said Wednesday, quoted by the official Syrian Arab News Agency.

In Washington, State Department spokesman Adam Ereli reacted to the report by saying, “Israel should halt settlement activity.”

“It has been our long-standing policy that there should not be settlement activity in land that the final status of which has not been determined through negotiations,” Ereli said.

He added that “the State Department supports direct negotiations between the Israelis and Syrians to resolve the issue of the Golan.”

Officials in Prime Minister Ariel Sharon’s government insisted Wednesday that the plan, approved by a ministerial committee Tuesday, was not meant as a rebuff to Syrian President Bashar Assad, who in a December interview with The New York Times urged Washington to work for the renewal of peace talks between Israel and Syria.

Syria, still technically at war with Israel, demands the return of the Golan, which Israel captured in the 1967 Mideast War, as part of any potential peace deal.

In response to Assad’s comments, Sharon said this week that Syria must crack down on terror groups operating from its territory and indicated that Israel would not agree in principle to give up the Golan prior to any talks, a previous Syrian demand that Assad appeared to ease away from.

Israeli officials have indicated they are interested in reopening the peace talks that broke down in 2000.

Media reports also said an Arab-Israeli lawmaker from Sharon’s Likud Party was to travel to Damascus at Assad’s invitation to discuss the possibility of new talks.

Israel annexed the 620-square-mile Golan in 1981, though its sovereignty there is not internationally recognized. Its current population of about 35,000 is roughly evenly divided between Israelis and its original Druse Arab residents.