The country's Land Administration on Monday published notices for bids to erect 609 units in Pisgat Zeev and 606 units in Ramot in East Jerusalem. It also reoffered bids for 72 homes in Ariel in the West Bank.
Israel's building of settlements in the West Bank and housing construction in East Jerusalem have been major stumbling blocks in forging peace efforts and a two-state solution between Israel and the Palestinians.
Palestinian government spokeswoman Nour Odeh said the Palestinians "don't recognize the legitimacy of any settlement construction in the occupied Palestinian territories, especially in East Jerusalem."
"We regard this announcement as a new expression for Israeli defiance of will of the international community. Israel is creating realities on the ground that contradicts the spirit and letter of signed agreements and relevant resolutions, and it is the responsibility of all responsible international actions to put an end to this assault on the prospects of peace and Palestinian rights to freedom and independence," she said.
Mohammed Shtayyeh, a leader in the Palestinian movement Fatah, criticized Israeli Prime Minister Benjamin Netanyahu and Foreign Minister Avigdor Lieberman, saying, "This is all Netanyahu and Lieberman have to offer: the destruction of the two-state solution and the imposition of an apartheid regime."
Ariel Rosenberg, the spokesman for Israel's Ministry of Housing and Construction, said the government made the announcement last year of its intention to build in Pisgat Zeev and Ramot. Rosenberg said it has taken a year for the tender to be announced because of an argument over infrastructure development.
But Israeli group Peace Now, a critic of settlement policies, called the announcement the "true answer" from Netanyahu to Palestinian President Mahmoud Abbas and his "strong commitment" to a two-state solution.
"It seems that Netanyahu is afraid of the new administration that is being elected today in the U.S. and he has chosen the day of election to publish the tenders so that there will be the least public attention to his action," Peace Now said on its website.
Peace Now notes that the Ariel tender is a remarketing of prospective units not sold in previous bidding last December.
"This is another indication to the fact that the settlement of Ariel is not so attractive for Israelis, and that the government's efforts to expand it, comes mainly from political reasons, and not due to the housing needs," Peace Now said.
Israel captured Jerusalem and the West Bank during the Six Day War in 1967.
Israel has annexed all of Jerusalem and considers the city its capital. It has occupied the West Bank and allowed Jewish settlements to take root there.
But Palestinians supporting the two-state solution maintain the eastern part of Jerusalem should serve as the future capital of a Palestinian state and regard the West Bank as the future territory of an independent state.