The project was valued at an estimated 350 million dollars.

The Defense Security Cooperation Agency (DSCA) said the bases would be built with US assistance promised to Israel as part of the October 23, 1998 Wye River Accords.

The implementation of the accords, under which Israel promised to withdraw its troops in stages from 13 percent of the occupied west Bank in return for Palestinian pledges on security, stalled in 1999 and the withdrawal was never fully implemented.

Pentagon and State Department officials were unable to explain why the Wye River Accords were now being cited as the basis for a program to build military bases in Israel.

In a statement, the DSCA said, "The implementation of the Wye River Accords necessitates that certain Israeli Defense Forces' military facilities, along with their respective units, be relocated from occupied territory in the West Bank."

"By providing military facilities in Israel, the proposed sale of defense construction services will assist Israel in relocating those military units," it said.

The agency said it would not alter the military balance in the region because it would provide "only facilities for relocating military units."

The US Army Corps of Engineers will provide planning, design, acquisition, construction and management services for the program, the DSCA said.

"The estimated cost is 350 million dollars," the agency said.

In February, 2000, when the Pentagon announced an identical Israeli base building proposal, it estimated the cost at 200 million dollars.