JERUSALEM: Israel plans to build 20,000 new settler homes, the biggest batch of tenders it has ever issued in the occupied West Bank, settlement watchdog Peace Now said on Tuesday.

“The housing ministry announced tenders for the planning of 20,000 settler homes,” Peace Now director Yariv Oppenheimer told AFP.

“This is a record,” he added.

Prime Minister Benjamin Netanyahu's office stressed he had opposed some 1,200 of the homes slated for construction in the highly contentious area of the West Bank known as E1.

But Oppenheimer said the fact that the government was pressing ahead with the tendering process for the remaining 18,800 units, at a cost the Haaretz newspaper put at 45 million shekels ($13 million, 10 million euros), showed the government's commitment to the wider settlement project.

“The setting aside of these public funds suggests the government is serious (about settlement expansion), and suggests it's only pretending to negotiate while it pursues its settlement construction,” Oppenheimer said.

“It also shows that the prime minister does not believe in a two-state solution for two peoples (Israelis and Palestinians), contradicting what he says.”

The announcement came after Palestinian negotiators said failure to reach a peace deal with Israel would be better than inking an agreement which allows it to continue settlement construction.

“In the absence of political will from the Israeli side to take the negotiations seriously, we believe that it is better not to reach a deal than to reach a bad deal,” negotiator Mohammed Shtayyeh said in a statement Monday.

His remarks came just days after US Secretary of State John Kerry wrapped up yet another visit to the region aimed at shoring up the peace talks, which appear close to collapse after just three months of meetings.

Shtayyeh accused Israel of taking part in the talks solely as a front to deflect international pressure over its continuing settlement construction on land it seized in the Six Day War of 1967 and which the Palestinians want for their promised state.

“By insisting on building settlements in Palestine, the government of Israel is showing ... that it is not interested in reaching a peace agreement. They show no seriousness,” he said.

Israeli settlement construction brought the last round of talks in 2010 to a halt just weeks after they had begun.

Several Israeli officials have claimed the settlement announcements have been in keeping with tacit “understandings” between the two sides linked to the release last week of a total of 52 veteran Palestinian prisoners since August.

But the Palestinians deny any such agreement exists, a position backed by Kerry on his latest visit.