With international attention riveted on Gaza in the run-up to Israel's planned withdrawal there, the government of Israeli Prime Minister Ariel Sharon is shoring up Israel's hold on the Greater Jerusalem area.
Even as Israel handed over a second West Bank town - Tulkarem - to Palestinians yesterday, its plan to expand its largest settlement, three miles from Jerusalem, has angered Palestinians who say it's a direct violation of the peace process.
The idea behind building 3,500 residential units at the Maale Adumim, say both proponents and critics, is to fill the territory between it and existing settlements within annexed East Jerusalem with Israeli housing.
But those three miles make up some of the most sensitive real estate in the Israeli-Palestinian dispute. They help to determine which side enjoys territorial contiguity in and around traditionally Arab East Jerusalem, which the Palestinians view as essential for having a viable capital of an independent state.
Israel sees the area as vital to its own hold on Jerusalem as an undivided capital.
"The implications are huge," says Jeff Halper, director of the Israel Committee Against Home Demolitions, which opposes the plan. "This puts the entire peace process in jeopardy."
The new housing plan, confirmed Monday, he says, will accelerate a process by which Israeli settlement construction and the building of the West Bank separation barrier are breaking up Palestinian areas in and around Jerusalem into isolated enclaves.
More specifically, the planned construction will help drive wedges between the Arab areas of a-Tur, al-Zaim, Anata, and Isawiya, he says. "East Jerusalem was developing organically, but this fragments East Jerusalem so that there is no contiguity," he says. The construction may pave the way, he adds, for Maale Adumim to be annexed as part of a Greater Jerusalem - which would include other large settlements that separate Arab areas of Jerusalem from the rest of the West Bank.
Israeli Foreign Ministry spokesman Mark Regev says the construction in no way forecloses peace negotiations. Rather, he says, it is in keeping with understandings reached with the US last April that settlements that are major population centers will remain in Israeli hands under future peace arrangements.
"Maale Adumim is the largest of the settlement blocs and it is clear it will stay in Israel," he says. "Maale Adumim is part of Israel in every peace plan, even the Geneva plan [by Israeli doves]."
The idea of expanding Maale Adumim, a settlement of about 27,000 people, by about 50 percent and linking it with Jerusalem is backed by some key figures in the Labor party, such as the Housing Minister Yitzhak Herzog and Ehud Barak, former prime minister.
Ahmed Batsh, a Palestinian legislator from Jerusalem, said: "Israel is exploiting the Gaza withdrawal [as a diversion] to complete the expansion of Maale Adumim and Gush Etzion," a settlement bloc south of Jerusalem. "It is laughing at the world."
The international peace blueprint known as the road map calls explicitly for the creation of a "viable" Palestinian state alongside a secure Israel, and President Bush has stressed that a state built on "scattered territories" will not work.
But the new settlement plan and the heated Palestinian reactions to it are underscoring the very different meanings of viability and contiguity to Israelis and Palestinians.
Mr. Regev, the Foreign Ministry spokesman, says: "Israel wants there to be a viable Palestinian state and attaches importance to its contiguity. We certainly have no interest in a failed Palestinian political entity, society, and economic and political system." Palestinian success at institution-building, he adds, "is good for stability and peace."
But contiguity, by Regev's definition, is transportation related, not territorial. "The idea is that a Palestinian can go from Jericho to Ramallah without passing an Israeli roadblock, or from Jerusalem to Hebron without passing a roadblock," says Regev.
"We would also like to see a contiguous connection between the Gaza Strip and the West Bank," he says.
But the Palestinian view is that "a contiguous state means it's all part of one country and that you go from one part to another while being in the same territory and without passing through or being under the control of another country," says Michael Tarazi, legal adviser to the Palestine Liberation Organization. "Contiguity is not that you can drive from one disconnected piece to another using roads, bridges, and tunnels."
A US official said yesterday that the planned Israeli construction violates the spirit of the road map. "If you take a legalistic approach you could argue we are not in the road map at the moment and that the Palestinians have not fulfilled their requirement to dismantle terrorist groups. But this still goes against the spirit of the road map and the spirit of the times and it is not conducive to creating a positive atmosphere for progress."
Asked what a viable state means, the official, who refused to be identified, says: "Neither viability nor contiguity have been defined to a T. There is no map in the State Department of our policy on what a Palestinian state should look like, but it is assumed that it is not little isolated pockets here and there. Contiguity through tunnels and bridges raises questions."
• Wire services contributed to this article.