Olmert approves homes for West Bank settlement

By Avida Landau

JERUSALEM (Reuters) - Israel announced plans to build hundreds of new homes in a Jewish settlement in the occupied West Bank on Sunday in a move the Palestinians denounced as another blow to U.S.-brokered peace talks.

The new building was announced three days after a Palestinian gunman killed eight students at a Jewish seminary in Jerusalem that was associated with the settler movement.

Israeli officials said they revived a plan to build a total of 750 homes in Givat Ze'ev, a settlement near Jerusalem.

Housing Ministry officials said 200 partially-constructed units would now be completed. Prime Minister Ehud Olmert authorized building another 330 new homes in the area, his spokesman, Mark Regev, said.

Housing ministry officials said the remaining homes would be built at a later date.

Seeking to assuage U.S. and Palestinian demands for an end to Jewish settlement activity in the West Bank, Olmert ordered ministries to seek his approval before authorizing new building outside the boundaries that Israel has drawn for Jerusalem.

Givat Ze'ev lies just outside those boundaries.

The peace talks, launched in November with the goal of reaching a statehood agreement before U.S. President George W. Bush leaves office next January, have been stalled by disputes over Jewish settlement building and a deadly Israeli offensive in the Hamas-controlled Gaza Strip.

Israel Radio said the ultra-Orthodox Shas party, a key partner in Olmert's coalition, had threatened to bolt the government unless the Givat Ze'ev construction was approved.

But a senior government official said the decision to authorize the construction was made before Thursday's attack.

Regev said the construction plan dates back nearly a decade: "This is not a new decision. This decision predates this government."

But Regev added: "We have approved it. It is consistent with our policy of building within the large settlement blocs, which will remain in Israel in any final-status agreement."

Palestinian negotiator Saeb Erekat condemned the decision.

"This will undermine the talks," he said of the announcement, four days before a U.S. general was to convene the first meeting of a special committee to assess whether Israel and the Palestinians are meeting their commitments under the long-stalled peace "road map".

The road map calls on Israel to halt all settlement activity and on the Palestinians to rein in militants.