Thousands of Chinese construction workers imported to Israel to expedite housing construction won't be employed on projects in the occupied West Bank or in East Jerusalem under an agreement between the two countries.

The Israeli cabinet approved the condition as part of a deal to bring in up to 20,000 Chinese construction workers in an effort to reduce domestic housing prices by increasing supply. The first 6,000 workers are due to arrive in Israel within the next six months.

Israeli government sources said China was concerned over the safety of its workers. The Israeli Finance Ministry housing director Avigdor Yitzhaki said the condition was not politically motivated.

But government sources said China has joined other countries in viewing the West Bank and East Jerusalem as occupied territories and settlements as illegal. Israel has similar agreements with the governments of Bulgaria, Ukraine, Romania and Moldova.

Israel's Finance and Construction Ministries said there were approximately 235,000 construction workers in the country at the end of 2016. This included 42,000 Palestinians from the West Bank, 3,500 from China, 2,800 from Moldova, 1,000 from Bulgaria and several hundred from Romania.

In November, Israel's Housing Ministry selected five Chinese and one Portuguese construction firm for housing projects. Each of the six companies is expected to bring into the country up to 1,000 workers and will be allowed to operate locally for five years.