(dpa) - A report that Israel plans to build nearly 2,000 new apartments in Jewish settlements in the West Bank in 2008, coupled with the construction of 600 homes in East Jerusalem, seems certain to set it on a collision course with the Palestinians, and could jeopardize peace negotiations.
Even before the report on the largest settlement construction plan in a decade appeared Wednesday in the Israeli Yediot Ahronot daily, the chief Palestinian negotiator, former premier Ahmed Qureia, was telling members of the Fatah party that "the talk about settlement expansion is a blow to the peace process and the negotiations.
"All settlement activities, old and new, are illegitimate, illegal and unacceptable," he said.
Palestinians, the international community, and a large number of Israelis, believe the Israeli settlements in the West Bank are clearly illegal, and all should be uprooted as part of a peace deal with the Palestinians.
Successive Israeli governments have never shared this view, and even if Olmert, who has spoken of major Israeli concessions in the West Bank, wanted to remove the settlements, his current political realities prevent him from doing so.
But at the same time, the construction could also lead to tensions with Israel's main backer, the United States, whose Secretary of State Condoleezza Rice said Monday, only two days before the report of the Israeli construction, that expansion of Jewish settlements in the West Bank was "not consistent" with Israel's obligations under the international road map peace plan.
The plan, launched in 2003, stymied almost immediately afterwards, and then revived to run concurrently with the current round of Israeli-Palestinian negotiations, calls, among its other clauses, on Israel to freeze all settlement activities.
But even from the beginning of the road map, then-Israeli premier Ariel Sharon insisted that Israel would continue to build in settlements to accomodate "natural growth."
He also said that in any final peace agreement with the Palestinians, Israel would keep the large settlement blocks, mainly, but not exclusively, groups of settlements near Jerusalem.
A spokesman for Olmert, confronted with the Yediot report, said Wednesday that Israel was keeping its commitment to freeze construction elsewhere in the West Bank, outside the large settlement blocks it plans to keep "anyhow."
"The only construction going on is in the Jewish neighbourhoods of Jerusalem and the large population centres. They are areas which will stay inside Israel in any final status agreement with the Palestinians," Mark Regev told Deutsche Presse-Agentur dpa.
In public at least, Palestinians object to Israel keeping the settlement blocks, and are particularly sensitive to Israeli expansion in East Jerusalem, which they want as the capital of their future State.
The United States too believes the future of the settlements should be the subject of negotiations, and not to unilateral moves.
But for Olmert, the problem is how to balance the demands of the Palestinians and the international community with his political survival at the head of a shaky and far-from-popular coalition.
One of the main constituents of the government, the ultra-Orthodox Shas Party, has been making increasingly hawkish threats to leave the coalition if serious negotiations begin on diving Jerusalem.
Shas, and another ultra-Orhtodox Israeli party, United Torah Judaism, (UTJ) have also been demanding that homes be built in the West Bank, for ultra-Orthodox Jews.
Olmert cannot afford to alienate Shas and face the risk of the party bolting the coalition, and thus possible precipitate new elections, which - according to the polls - he would easily lose. And although UTJ is not a formal part of the government, the beleaguredpremier needs its support as a political "safety net."
"These two parties exploit their political strength and move Olmert around like a puppet on a string," Uzi Benziman, a commentator for the Ha'aretz daily says.
"Olmert tries to pretend that his response to their demands is mere small change, but in fact they are dictating the agenda with regard to settlements ... and, in this way, they have an influence over the entire Israeli-Palestinian arena."