Israel's Housing Ministry linked the new construction to a nationwide plan to lower housing prices, which have skyrocketed in recent years, and appease protesters demanding affordable living space.

The tenders seek builders for the projected expansion of the Beitar Illit enclave outside Jerusalem and Karnei Shomron, a settlement on the outskirts of the West Bank's largest Palestinian city of Nablus.

Ariel Rosenberg, a ministry spokesman, said it could take as long as two to three years before the homes were built, adding that the tenders were the first issued for occupied areas beyond Jerusalem since a building freeze expired in September.

Prime Minister Benjamin Netanyahu in November 2009 had ordered a 10-month temporary halt to new settlement-building on territory Israel captured in a 1967 war. He declined U.S. appeals to extend the moratorium late last year.

Reuters