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Israel is ready to "immediately" build 10,000 homes in the West Bank and east Jerusalem to lower housing costs, Housing Minister Uri Ariel was quoted as saying on Thursday.

"To immediately alleviate the housing crisis we must massively build in (east) Jerusalem and the settlement blocs in Judaea and Samaria," the Yediot Aharonot newspaper quoted Ariel as telling a parliamentary committee.

"Settlements like Beit Arye, Ofarim, Elkana are in the centre of the land," he said, "and we are prepared to launch 10,000 units there immediately."

On his Facebook page, pro-settler Ariel noted that "For an entire year there has been no state marketing in Judaea and Samaria (the biblical term for the West Bank) and east Jerusalem."

"Not marketing these units is raising the costs of homes nationwide," he wrote.

In May, settlement watchdog Peace Now said that no new tenders had been issued for West Bank homes as newspapers suggested that Prime Minister Benjamin Netanyahu had agreed to "rein in" construction to help US Secretary of State John Kerry's efforts to renew a peace process.

Israel seized east Jerusalem and the West Bank during the 1967 Six-Day War and later annexed it in a move never accepted by the international community. It does not see east Jerusalem construction as settlement building.

But the Palestinians want east Jerusalem as the capital of their future state.

The Palestinians have said they will not return to direct talks unless Israel completely halts settlement construction and accepts the 1967 lines as the basis for negotiations.

Although Israel has expressed a willingness to resume talks, it has insisted it would only do so if there were no such "preconditions".