Israel votes new funding for settlements

Israel's Prime Minister Benjamin Netanyahu gestures during the weekly cabinet meeting in Jerusalem December 13, 2009.

JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu's cabinet voted more funding for Jewish settlements on Sunday as violence over a temporary settlement building freeze in enclaves in the occupied West Bank increased.

Defense Minister Ehud Barak voted against the plan, saying it would reward settlers living in parts of the West Bank where Palestinians have lately come under attack, such as a village where parts of a mosque was torched at the weekend.

Netanyahu condemned the burning of carpets and copies of the Koran at Yasuf village near Nablus, where graffiti scrawled in Hebrew called the act "a price tag." It was similar to a slogan left by suspected settlers after other acts of vandalism.

It was a warning by some hard-line settlers to Israeli authorities that they would strike at Palestinians with the aim of raising tensions as Israeli curbs and actions against the settlements continued.

In remarks to his cabinet, Netanyahu denounced the attack on the mosque as an "especially serious crime" and said he had urged security personnel to speedily apprehend the perpetrators, a statement from his office said.

Afterwards, 21 ministers approved and five opposed a plan Netanyahu said would set "national, regional priorities" to offer incentives to areas that are home to nearly half Israel's Arab population and to towns and settlements in the periphery.

The plan has an estimated 2 billion shekels ($530 million) to improve schools, jobs and infrastructure nationwide.

About five percent of that sum, 110 million shekels ($30 million), would be set aside for about 100 Jewish settlements, an official said.

Finance Minister Yuval Steinitz, a close ally in Netanyahu's right-wing Likud party said on Israel Radio the added funds would show settlers that despite the building freeze, Israel "also supports and reinforces" them.

BUILDING FREEZE IS 'A SHAM'

Officials said despite the plan Israel would continue to abide by a limited 10-month suspension in settlement building Netanyahu announced last month as part of an effort to renew stalled U.S.-backed peace talks.

Palestinian President Mahmoud Abbas, who has insisted on a complete halt to settlement building in territory Israel captured in a 1967 war that Palestinians wants for a state, has rejected the freeze as an insufficient step.

Saeb Erekat, a senior Abbas aide, said the map "serves as a blueprint for future settlement expansion" and described the settlement moratorium as "a sham."

"Rather than make peace its number one priority, Israel continues to prioritize settlements and the relentless colonization of occupied Palestinian land, rendering the two-state solution politically and economically unviable," Erekat said in a statement.

Barak, leader of the left-leaning Labour party whose cabinet ministers were those who voted against the plan, protested that it gave some settlers "greater proportional representation than their numbers," a statement said.

"There are some small settlements who consistently constitute a source of extremists' activity," Barak added, citing the weekend vandalism at the mosque in Yasuf, an assault that has sparked outrage in Israel where it dominated news headlines.

A group of dovish rabbis met Palestinians from the village at a West Bank roadblock, to hand over copies of the Koran and apologize for the vandals.

"We are here today in order to protest against the deed done in the mosque. By our law, divine law, this is a crime," Menachem Froman, an Israeli cleric and peace activist, said.

Earlier on Sunday a Jewish settler woman was stabbed and wounded on a West Bank roadside near Bethlehem in what Israeli police said on Sunday was an attack by a Palestinian militant. There were no immediate claims of responsibility for the attack.

(Editing by Ori Lewis)