The Israeli government on Tuesday published tenders for the construction of 1,285 new housing units in the West Bank and East Jerusalem, Haaretz newspaper reported.
The construction announcement came on the day of US elections, leading to criticism from the non-governmental organization Peace Now, DPA reported.
It called the construction bids in the occupied territories as the "real answer" from Prime Minister Benjamin Netanyahu to a conciliatory speech from Palestinian President Mahmoud Abbas.
In an interview with Israel's Channel 2 last week, Abbas emphasized his demands for a Palestinian state and at the same time underlined the right to exist for the Jewish state. He also indicated a willingness to give up the right to return for refugees, a key issue in the conflict, and said he was committed to preventing another violent uprising.
US President Barack Obama pressured Israel for a temporary ban on building in the settlements in Palestinian Territories, which Netanyahu allowed to lapse.
Rival Republican Mitt Romney has accused Obama of "throwing Israel under a bus" and ignoring the US' key ally in the region by not visiting Israel as president.