Israel has issued a tender for the construction of nearly 1,000 additional settler homes in the occupied West Bank, an anti-settlement watchdog said on Monday.

Peace Now says the development of 974 new housing units would allow the population of the Efrat settlement to expand by 40 per cent and further block the development of the nearby Palestinian city of Bethlehem.

Israel captured the West Bank, along with the Gaza Strip and east Jerusalem, in the 1967 Mideast war. The Palestinians want all three territories for their future state and view the settlements as a major obstacle to peace, a position with wide international support.

Israel has built well over 100 settlements across the West Bank. Over 500,000 settlers live in the occupied West Bank, which is home to some 3 million Palestinians. The settlers have Israeli citizenship, while Palestinians live under military rule with the western-backed Palestinian Authority administering population centres.

Peace Now, which favours a negotiated two-state solution to the conflict, accused Israel of pressing ahead with settlement construction while dozens of hostages captured in Hamas's October 7, 2023, attack languish in captivity in the Gaza Strip.