Prime Minister-designate Benjamin Netanyahu has struck a secret deal with Yisrael Beiteinu leader Avigdor Lieberman for highly contentious construction on West Bank land known as E1, Army Radio reported Wednesday.

A source close to the negotiations between the pair told Army Radio that the plan had been agreed upon even though it did not appear in the official document detailing the coalition deal between Yisrael Beiteinu and Netanyahu's Likud.

The plan is for the West Bank settlement of Ma'aleh Adumim to build 3000 new housing units on the territory, which stretches between it and Jerusalem, the source was quoted as saying.

Construction in the area is particularly sensitive because it would create contiguity between the settlement and the capital, which in turn would prevent Palestinian construction between East Jerusalem and Ramallah.

This would also make it difficult to reach agreement between Israel and the Palestinians on the question of permanent borders.

For this reason, the United States has strongly opposed this sort of Israeli construction for more than a decade. Israeli governments have avoided construction in this area, mostly because of U.S. pressure.