Israel captured the West Bank, including East Jerusalem, from Jordan in the 1967 Middle East War. It annexed East Jerusalem in 1980, in a move not recognised by the vast majority of the international community.

Opponents of the E1 project have warned that it would effectively block the establishment of a Palestinian state because it would cut off the north of the West Bank from the south, and prevent the development in the centre of a contiguous Palestinian urban area connecting Ramallah, East Jerusalem and Bethlehem.

Peace Now, an Israeli anti-settlement watchdog that has challenged the plans in court, said: “The government is trying to sign contracts with contractors before the elections so that it will be much harder for the next government to cancel the construction.”

It said even the partial implementation of the construction plans would “fundamentally” alter “the geographic and strategic character of the area by severing the northern West Bank from the south and isolating East Jerusalem”.

“Building in E1 will ruin the possibility of reaching an end to the conflict and a peace arrangement based on two states,” it said.

Jamal Juma, a Palestinian activist for the Stop the Wall campaign, who lives in Jerusalem, said the project would have a devastating impact on Palestinians.

“It is destruction of the communities, it’s destruction of families… this is a disaster”, he told the BBC.

He added that more than 40 Bedouin communities would be affected and would have to be evicted.

A spokesperson for the UN’s Secretary-General António Guterres said he was “deeply alarmed” by the new tenders.

“The Secretary-General calls on Israel to refrain from taking any further steps in this regard”, they said.