Israel Public Radio reported on Sunday that the Defence Ministry was to appoint contractors this week to go ahead with the construction that seeks to prevent Palestinian
from entering Israel.
Work on the 70m wide barrier is due to be completed before Israel begins its planned three-to-four-week evacuation of all the 8000 Jewish colonists and occupation forces from occupied Gaza from July 20, the radio added.
Israel claims building another barrier is essential deterrent to bar the infiltration of Palestinians.
Palestinians have condemned the barrier as an "apartheid wall" and charge that the fence seeks to predetermine the borders of their future state.
The existing barrier was built one year after the 1993 Oslo accords, more or less along the 1967 Green Line, almost hermetically sealing the Palestinians living in the 362sq km territory.
The International Court of Justice in The Hague ruled the barrier, which often juts deep into Palestinian territory, "illegal" last July, but Israel vowed to complete building it.
Israel on Sunday allowed private Palestinian cars to cross a major checkpoint connecting the north and southern Gaza Strip for the first time in more than a year, said Palestinian and Israeli sources.
A new terminal at the Erez crossing between Israel and the Gaza Strip was also opened Sunday, an Israeli military spokesman said.
The restriction on the Abu Hulli road block was lifted as part of confidence-building gestures promised by Israeli Prime Minister Ariel Sharon and Palestinian leader Mahmud Abbas at a peace summit last month.