Israel has begun settlement expansion says insider

JERUSALEM - Israel has begun construction to link a West Bank settlement to Jerusalem, sources in the prime minister's office said, in a move a Palestinian official said could torpedo future peace talks.

Israeli bulldozers have already broken ground to build a police station near Maale Adumim, the biggest West Bank settlement, as part of a project to build at least 1,000 homes on land that would link the enclave to Jerusalem, they said.

The United States, which wants Israel to halt Jewish settlement expansion, has officially opposed the plan, which would cut the West Bank off from Arab East Jerusalem. Israeli officials had said in September that the project was on hold.

The sources said Israeli Prime Minister Ariel Sharon told US officials before his stroke in January that his "E1" plan was in its advanced stages. Washington approved construction of the station, but not of the neighborhood, the sources added.

Palestinians want East Jerusalem, which Israel captured in the 1967 Middle East War in a move not recognized internationally, as capital of a future state.

Palestinian Chief Negotiator Saeb Erekat said that if the "E1" plan was carried out, it would "undermine any future efforts to revive the peace process", and added that the Palestinian Authority condemned "dictations and unilateral steps".

Olmert, the frontrunner in a March 28 election, said last week he planned to impose permanent Israeli borders by 2010 by quitting some West Bank land unless Hamas, set to form a new Palestinian cabinet, recognized Israel and renounced violence.

Olmert had said his government would give a Palestinian Authority led by the Islamic militant group, which is sworn to destroy the Jewish state, "reasonable" time to change its stance and disarm before Israel would take unilateral action.

He has also said Israel could not hold on to all West Bank land but would retain large settlements, including Maale Adumim. He also said a 600-km barrier Israel is building in the West Bank would largely follow the Jewish state's borders.

The Palestinians describe the barrier, which cuts into land they want for a state, as a land grab. Israel says it is necessary to stop suicide bombers.

- REUTERS