The Hmoud family once prospered in this arid Palestinian farm village by cultivating banana and eggplant crops, earning enough to send a son abroad for medical school and to build a house with a showy staircase and a two-story window.

But drought has decimated the spring that is Auja's only agricultural water source, and fields once filled with palm trees are now empty. Village residents have been forced to find work in the greenhouses near Jewish settlements that are hooked up to Israeli water mains.

"This before you is barren land," says Mahmoud Hmoud, standing in parched field littered with plastic sheeting. "Ten years go it was blooming."

Long a hot-button in the parched Middle East, the need for a water-rights compromise here has become more acute after years of dry winters, as Palestinians struggle with what they say are insufficient quotas and Israel mulls steep tax hikes on home and garden usage. Both sides blame each other for failing to honor the 1995 interim agreement still in effect. Though potential solutions exist, little progress can be made until the peace process – stalled for nearly a year – is restarted.

Two straws, one glass of water

The dispute partly focuses on rights to a "mountain aquifer" underneath the hilltops of the Israeli-occupied West Bank. It collects rainwater, most of which then flows through subterranean rock formations across the Green Line into Israel proper.

"It's actually as if two people are drinking from the same glass of water with two straws,'" says Prof. Hillel Shuval, an environmental resource expert who helped negotiate a water compromise as part of the Geneva Initiative peace agreement, a hypothetical model put forth in 2003. "The ground water under the West Bank and Israel is a shared resource."

Palestinians and human rights groups contend that Israel takes the water for its population. Israelis consume four times as much per person as Palestinians, according to the World Bank. Meanwhile, Palestinians say they need Israeli permission to access even the water that remains within the West Bank.

"It's a systematic policy," says Nader Khateeb, who heads the Bethlehem office of environmental group Friends of the Earth Middle East. "Controlling the water means controlling the economy and development."

Amnesty report criticizes Israel

An October report by Amnesty International last month accused Israel of denying Palestinians access to local water resources while allowing neighboring settlements "virtually unlimited supplies." Amnesty accused Israel of neglecting Palestinian infrastructure development and leaving as many as 200,000 without running water. Hundreds of thousands of settlers use the same amount as 2.3 million Palestinians living in the West Bank, the report alleged.

Professor Shuval rejected Amnesty's claims of neglect by Israel of Palestinian infrastructure. He noted that when Israel captured the West Bank and Gaza in 1967, practically no Palestinian villages had a central water supply. He did say, however, that Israelis had developed their own water access in the area of the Jordan Valley, a practice Mr. Shuval acknowledged is illegal under international law.

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