Israel's Housing Ministry has spent millions of dollars on unauthorized construction in the West Bank in recent years, said a government report released on Wednesday, and the attorney general imposed a new monitoring system on settlement spending.
Also Wednesday, the Palestinian legislature fired a high-ranking official on corruption charges. It was the first time the lawmakers had dismissed a senior official for involvement in corruption.
In Gaza, two Palestinians were killed and 16 were wounded, including a news photographer, in Israeli-Palestinian violence. In the West Bank, an armed Hamas fugitive was shot dead by troops.
The report on the settlements, issued by the watchdog state comptroller, detailed how the Housing Ministry funneled about US$6.5 million for illegal construction, more than half of it to unauthorized outposts.
Last month, Attorney General Meni Mazuz ordered an unprecedented freeze on funding for settlement construction, charging that settlements were diverting state funds to the outposts.
The Justice Ministry announced on Wednesday that Mazuz had lifted the freeze after approving a monitoring system to ensure government money is not used for illegal projects.
From January 2000 to June 2003, the Housing Ministry approved 77 contracts for construction projects in 33 West Bank areas, 18 of them unauthorized outposts, the report said. Of the US$6.5 million given to illegal West Bank construction, about US$4 million went to the outposts, the comptroller's report said.
Housing Minister Effie Eitam, leader of the pro-settler National Religious Party, pledged to respect the law.
"I promise that every shekel [dollar] that comes from the government will be transferred to legal activities,'' Eitam told Israel's Army Radio after the report was released.
Israel is obligated under the US-backed "road map" peace plan to dismantle dozens of unauthorized West Bank outposts, many of them no more than a trailer and an Israeli flag on a barren hilltop.
Palestinians view the outposts as further encroachment on land they want for a state. Although Israel has removed a handful of the outposts, most were rebuilt within days.
A US official declined to respond to the findings in the report but said the American position on illegal outposts is well known.
"Consistent with the road map, settlement activity is to be frozen, and certainly illegal outposts even more so," the official said, speaking on condition of anonymity.
On Sunday, members of Prime Minister Ariel Sharon's party voted against his plan to unilaterally withdraw from the Gaza Strip and small parts of the West Bank. In consultations Tuesday in New York, the "Quartet" of Mideast mediators -- the US, EU, Russia and UN -- endorsed Sharon's plan.
In a letter to the Quartet on Wednesday, Palestinian Prime Minister Ahmed Qureia said the defeat of Sharon's plan was an opportunity to return to negotiations "and the end to Israeli occupation of all Palestinian territory."
In another development, the Palestinian legislature voted on Wednesday to fire the head of the Palestinian Monetary Authority, after a parliamentary probe concluded he was involved in corruption and mismanagement.
Amin Haddad was the first high-ranking Palestinian official to be fired by the parliament for corruption. The monetary authority monitors the flow of money in the Bank of Palestine. The Palestinian administration assumed control over the private bank three years ago, but losses have tripled during that time to US$34 million.
"This is part of the parliament's war against corruption in the Palestinian Authority," said Hassan Khreishe, the Palestinian deputy parliament speaker.
Haddad could not be reached for comment.
The Palestinian Authority has been plagued by corruption, though foreign donors have praised recent reforms.
In the West Bank village of Talouza, troops shot dead an armed Hamas fugitive, the army said. Villagers said the dead man, Einad Janajra, was the target of an Israeli raid last month but escaped, while an innocent bystander was shot dead instead.
The army later apologized for killing the man, a university lecturer.
In Gaza on Wednesday, two Palestinians were killed in fighting with the Israeli army.
Palestinian officials said one person was killed after entering an unauthorized area near the border with Israel. Originally the Palestinians said two were killed, but only one body was found. The military said soldiers opened fire on two men, hitting one.
In the central Gaza town of Deir al-Balah, a Palestinian security guard was killed by Israeli gunfire after dozens of youths began throwing stones at troops. One of the wounded was a news photographer working for AFP, the French news agency said.
The army said soldiers fired at gunmen. The military demolished 10 buildings, uprooted dozens of olive trees and damaged infrastructure in the area. witnesses said.
The army has stepped up activity in southern Gaza since Palestinian gunmen killed a pregnant Jewish settler and her four young daughters in an ambush there on Sunday.
Also on Wednesday, Israel released a co-founder of Hamas, Mohammed Taha, after holding him for 14 months without charges. Taha was arrested in a raid on the Bureij refugee camp in central Gaza.
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