Israel's prime minister has ordered an investigation into how government officials announced plans for a new Jewish housing project in East Jerusalem during a visit by Joe Biden, the US vice-president.

Binyamin Netanyahu's office said he ordered the probe late on Saturday after he met with senior cabinet ministers.

The announcement of Israel's approval of 1,600 new homes while Biden was visiting Israel earlier this week in a bid to revive Israeli-Palestinian peace negotiations embarrassed the US vice-president and overshadowed his visit.

Netanyahu has since apologised for the bad timing of the announcement, but has given no sign he will cancel the construction orders.