JERUSALEM, June 11 (Reuters) - Israel is expected to approve on Thursday the allocation of 1 billion shekels ($337.8 million) to build new settlements and connect them to infrastructure in the occupied West Bank, Israeli anti-settlement group Peace Now said.

The plan is being promoted by Israel's far-right finance minister Bezalel Smotrich, a proponent of Israeli settlement expansion who has said he wants to bury the idea of Palestinian statehood.

According to Israeli Prime Minister Benjamin Netanyahu's cabinet schedule, ministers are expected to discuss the establishment of temporary sites that have already been approved in the West Bank.

The schedule did not say whether the ministers would approve new funding. Netanyahu's office did not immediately respond to a request for comment.

FUNDING FOR ROADS, WATER, RIGHTS GROUP SAYS

About 700,000 Israeli settlers live among 2.7 million Palestinians in the West Bank and East Jerusalem. Israel annexed East Jerusalem in 1980, a move not recognised by most countries, but has not formally extended sovereignty over the West Bank.

U.N. bodies and most countries view the West Bank settlements as illegal, citing international conventions. Israel disputes this, saying a Jewish presence has existed in the West Bank for thousands of years.

In a statement, Peace Now said the cabinet vote would bypass the standard settlement planning process. It said the settlements in question had been approved by Netanyahu's government over the past three years.

Both Peace Now and the news website Axios, citing a draft resolution, said the allocation of funds would include construction of infrastructure such as access roads, land preparation, sewage systems, water connections and related works, as well as temporary residential compounds.

A spokesperson for Smotrich, the finance minister, did not provide specifics but said the cabinet vote would strengthen Israeli settlements and that these are not new settlements, but rather existing sites.

Smotrich last week announced a major expansion ​by more than 2,000 homes of three Jewish settlements in the West Bank.

Palestinians and many countries view the settlements as a primary obstacle to peace, saying they eat into West Bank land that could make up a potential State of Palestine. The expansion of settlements and smaller settler outposts has been accompanied in recent years by a rise in Israeli settler violence, with settlers staging sometimes deadly attacks on Palestinians.

($1 = 2.9602 shekels)

(Reporting by Steven Scheer; Editing by Kevin Buckland)