Israel has set aside money in its budget for next year to build 750 homes in two settlements in the West Bank, the spokesman for the Israeli movement Peace Now announced yesterday.
Yariv Oppenheimer said: "We have discovered that the 2008 state budget includes 48 million shekels [US$12.3 million] for the construction of 250 homes in the Maale Adumim settlement and 50 million more to build 500 homes in Har Homa," a settlement in the annexed eastern sector of Jerusalem.
Questioned on Israeli Armed Forces Radio, Veterans Minister Rafi Eytan confirmed the projects.
"We have always said that we can build in Har Homa which is inside the municipal limits of Jerusalem," he said. "There may be problems for Maale Adumim, but we want to continue the natural extension" of big settlements.
Oppenheimer said he was against the spread of settlements, "which threatens the peace talks with the Palestinians."
Earlier this week Israel abandoned plans for a new settlement in the Atarot area of east Jerusalem, a decision which US Secretary of State Condoleezza Rice called a "good step" in the context of the newly revived peace talks.
A Palestinian official said on Saturday that the Palestinians would renew their demands for a freeze on settlement growth in the West Bank and east Jerusalem at their next meeting with Israeli negotiators.
"The next round of negotiations will take place on Monday and until now we are still waiting for a clear Israeli position regarding the freeze on settlements," said Yasser Abed Rabbo, a member of the negotiating team.
In November, Israel and the Palestinians agreed to relaunch the Middle East peace process after a seven-year hiatus at an international conference in the US city of Annapolis.
There the two sides agreed to proceed on the basis of the roadmap agreement, a 2003 blueprint for peace that requires Israel to freeze all settlement activity and the Palestinians to impose law and order in the territories.
The first round of negotiations in the talks was held on Dec. 12, with the Palestinian focus on Jewish settlements.
Israel does not consider the Har Homa project to be a settlement because it lies within the boundaries of Jerusalem, drawn up by Israel after it occupied and annexed the mostly Arab eastern half of the city in 1967.
But the international community has never recognized the annexation, and the Palestinians have made the demand that east Jerusalem be the capital of their future state.
"We demand a freeze of settlements in all Palestinian lands, without exception, whether in the city of Jerusalem or in any other part of the West Bank," Abed Rabbo said. "What applies in the West Bank applies in Jerusalem, and all settlement activity is illegal and unacceptable."
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