Palestinian Authority President Mahmoud Abbas says there will be no quick decision on whether to continue talks with Israel.
He said he would respond to Israel's lifting the ban on building in West Bank settlements after next week's meeting of Arab leaders in Cairo.
On Sunday, he had warned talks renewed earlier this month would be a "waste of time" unless the ban continued.
The 10-month moratorium came to an end at midnight (2200 GMT on Sunday).
Bulldozers started levelling ground for 50 homes in the settlement of Ariel in the northern West Bank, Israeli media reported, and similar activity was also reported in the settlements of Adam and Oranit. But construction work was expected to be slow because of the Jewish holiday of Sukkot.
With peace negotiations are in the balance, Mr Abbas is in a difficult position and he may be forced to compromise, says the BBC's Jon Donnison in Ramallah.
Under pressure from the United States, there are signs Palestinian negotiators may accept the moratorium on building is not officially going to be extended, as long as no major construction takes place in the coming weeks and months, our correspondent adds.
Speaking at a Paris press conference with French President Nicolas Sarkozy, Mr Abbas said he would discuss the settlement issue with Palestinian negotiators in Ramallah on Wednesday, and the 22-member Arab League in Cairo next Monday.