(adds lines on home demolitions, Palestinian reaction)
JERUSALEM, Feb 5 (Reuters) - Israel's Jerusalem municipality approved building plans on Wednesday for 558 new homes in the occupied West Bank, land that the Palestinians want for a future state.
A municipality spokeswoman said the local planning committee had approved requests by private contractors for the construction work in the settlements of Har Homa, Neve Yaakov and Pisgat Zeev.
The three settlements are in a part of the West Bank that Israel annexed to Jerusalem, in a move that has not been recognised internationally, after capturing the territory in the 1967 Middle East war.
The Palestinians have said that expansion of Israeli settlements, which most countries deem illegal, could derail the U.S.-sponsored peace talks that resumed in July after a three-year break.
The municipality spokeswoman said that the initial plans for the new dwellings were approved years ago.
The Palestinians are seeking a state in East Jerusalem, the West Bank and Gaza Strip. Israel pulled its troops and settlers out of the Gaza Strip in 2005, and the enclave is now run by Hamas Islamists opposed to the present peace drive.
Har Homa and Pisgat Zeev are in one of the areas in the West Bank that Israel says it intends to keep in any future land-for-peace deal with the Palestinians.
Also on Wednesday, Israeli authorities demolished three Palestinian homes they said were built without permits in occupied East Jerusalem, displacing five families.
Hanan Ashrawi, a senior member of the Palestine Liberation Organization, called the moves a "deliberate provocation of the Palestinians to drive them to leave the negotiations."
"Israel is not only capable of sabotaging the talks, but it is flagrantly destroying the chances of peace and stability throughout the region," she said in a statement.
Three weeks ago, Israel published tenders for 1,400 new homes in the West Bank and East Jerusalem. Anti-settlement watchdog Peace Now said at that time that Israel had announced plans for 5,349 new homes in those two areas since the peace talks restarted. (Additional reporting by Ali Sawafta and Noah Browning in Ramallah, Writing by Maayan Lubell, Editing by Jeffrey Heller)
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