Israel is allowing Jewish settlers to expand a building in Hebron, one of the West Bank's most volatile cities.
Palestinians object to Jewish construction in areas they envision for their future state.
Israeli Defense Minister Ehud Barak's office said Friday he gave the building permit to house a kindergarten in Beit Romano, a structure built in the late 1800s by a Jewish merchant. Today it houses a religious seminary.
Hagit Ofran of settlement watchdog Peace Now says Barak has become a "tool of the most radical settlers."
Hebron is holy to Muslims and Jews. Today, more than 600 Jews live there in fortified enclaves amid 170,000 Palestinians.