The Israel Lands Administration, a government agency, published a tender on Thursday inviting bids for the purchase of 22 plots for the construction of single-family homes in the Jewish settlement of Maale Adumim, near Jerusalem.
Last week Bush repeated a call on Israel to halt expansion of settlements in keeping with a US-backed "road map" peace plan envisaging a Palestinian state in the West Bank and Gaza Strip, lands Israel occupied in the 1967 Middle East war.
Israeli Prime Minister Ariel Sharon intends to dismantle Jewish enclaves in Gaza in August but has made clear he intends to hold onto large swathes of the West Bank, including the three large settlement blocs of Maale Adumim, Gush Etzion and Ariel.
He has also said Israel has no plans for any imminent territorial moves after its planned "disengagement" from Gaza and the northern fringe of the West Bank starting in August.
Palestinians say settlement growth in the West Bank aims to deny them a viable state called for by the road map.