Israel's Olmert seeks to demolish assailant's home

JERUSALEM (Reuters) - Prime Minister Ehud Olmert proposed on Thursday the demolition of the homes of Arab East Jerusalem residents who carry out attacks against Israelis after a Palestinian killed three in a bulldozer rampage.

Israeli authorities say Wednesday's attack and the fatal shootings of eight seminary students in March were carried out by Palestinians from the Arab east of the city. They hold Israeli identity cards that give them wide freedom of movement.

"I think we need to be tougher in some of the means we use against perpetrators of terror," Olmert told an economic conference in the southern port city of Eilat. "If we have to destroy houses, then we must do so, and if we have to stop their social benefits, then we must do so."

"There cannot be a case where they massacre us and at the same time they get all the privileges that our society provides," Olmert added.

In an earlier meeting with defense and justice chiefs, Olmert said he favored immediately destroying the homes of "every terrorist from Jerusalem," according to an Israeli government official.

Israel abandoned the demolitions of homes of Palestinians involved in attacks on Israelis, in a pledge to the Supreme Court in response to petitions by human rights groups against the procedure. Any renewal of the policy would likely draw legal challenges.

Defense and legal officials met on Thursday to discuss the demolition issue. Some 20 people live in the bulldozer driver's family home, relatives said.

Israel annexed Arab East Jerusalem in a move not recognized internationally, after capturing the area in a 1967 war, and gave Palestinians there the same blue identity cards issued to Jewish and Arab citizens of the Jewish state.

Palestinians want East Jerusalem as the capital of a would-be state they have been pledged under a U.S.-backed peace plan.

(Writing by Allyn Fisher-Ilan; Editing by Diana Abdallah)