The latest settlement construction was revealed in newspaper advertisements published on Monday seeking bids from building contractors, and would violate Israel's commitments under the US-backed road map peace plan.
The plans include a total of 228 housing units in the settlements of Beitar Illit and Efrat. Both communities are just outside Jerusalem.
The road map calls for a freeze on all settlement construction in the West Bank, which the Palestinians claim as part of a future independent state. Since accepting the plan in June 2003, Israel has continued to expand settlements.
The Palestinians also have not carried out their road map obligation to disarm fighter groups.
Raanan Gissin, spokesman for Ariel Sharon, the Israeli prime minister, said plans for the latest construction began more than five years ago and would take place in existing communities.
Gissin also noted that the construction would be in settlements that Israel plans to retain after a final peace settlement with the Palestinians.
He said: "These are the large settlement blocs, they will be strengthened."
Saeb Erikat, the Palestinian negotiator, condemned the settlement expansion and urged the US to intervene.
US embassy spokesmen in Israel were not immediately available for comment.
Saeb Erikat has condemned the
The settlement plans came even as Sharon's new political party, Kadima, signalled that it is ready to hand over West Bank territory to the Palestinians and work toward an independent Palestinian state after March elections.
Opinion polls forecast a strong victory by Sharon's bloc in the vote on 28 March.
A draft of Kadima's election platform published on Monday calls for conceding more land to the Palestinians as part of peace talks culminating in a Palestinian state.
The talks would be based on the road map, which endorses a Palestinian state, but says its borders must be reached through negotiations.
Meanwhile Haim Lotan, Sharon's doctor, told reporters that Sharon would undergo a minor heart operation early next month to correct a small hole.
Doctors said that Sharon was "in good health", his only problem being with his weight.