Israel National Roads Company has invited first tenders for the construction of the 60km Jezreel Valley Railway line, which will revive the route of the former Hedjaz Railway.
The initial tender covers the 6.5km section between Kfar-Baruch and Adashim Creek near Afula, while tenders for the rest of the line will be issued this year.
The $1.12bn project will link Haifa to Afula and Bet Sha'an and eventually form part of a connection between northern Jordan and Israel's Mediterranean Coast.
The double-track link, built for 160km/hr operation, will be used for passenger and freight services.
The entire line is expected to be complete by 2016.
The Israel and Jordan transport ministries are currently planning the next phase of the project, which will extend the line east over the Sheikh Houssain Bridge to Irbid in Jordan.