Israel has approved construction of 40 homes in a new settler enclave near the West Bank town of Bethlehem, effectively expanding a large settlement bloc there, the defence ministry said on Monday.
"The defence minister approved the construction of 40 housing units in Givat HaDagan in Efrat several months ago," the ministry said in a statement, adding that a tender for the project had been issued by the Israeli Land Authority.
Efrat lies in the sprawling Etzion bloc of settlements which lies southwest of Bethlehem, with the new district set to expand the bloc northwards.
The military is also mulling approval for another new settler enclave just to the west of Givat HaDagan -- a farm called Givat Eitam which would be built on land just to the east of the planned route of the vast separation barrier cutting across the West Bank.
"The IDF is currently reviewing the Efrat regional council's request regarding the establishment of a farm in the area known as Eitam hill. The request refers to a 309 dunam (77 acres, 31 hectares) territory owned by the Himnuta company," a statement from the military said.
Haaretz, which broke the story on Monday morning, said construction of the farm was a bid to preserve the land for the future expansion of Efrat, suggesting there were plans to build some 2,500 homes in that area.
With completion of the project, which is likely to take two or three years, "Jewish settlement in the northern Etzion bloc will reach the edges of Bethlehem's southernmost suburbs," the paper said.
Peace Now's Hagit Ofran said the project should be seen in the light of Israel's stated intention to annex the Etzion bloc in any future agreement with the Palestinians.
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"The building in Efrat is especially sensitive because it is east of the (main) road leading to Bethlehem," Ofran told AFP.
"That means that if Israel wants to annex Efrat, it will cut off Bethlehem from the southern West Bank."
The news was received angrily by the Palestinians who have said they will not hold peace talks while Israel builds on land they want for their future state.
Palestinian negotiator Saeb Erakat said the plan was "a message" from Israel to the Middle East Quartet of peacemakers which is struggling to revive the moribund peace talks, and is due to hold separate talks with the sides in Jerusalem on Wednesday.
"It has become the Israeli government's approach to announce new settlements every time the Quartet meets in a clear challenge to the Quartet's efforts and the international community as a whole," he told AFP, saying Israel had once again "chosen settlements over negotiations."
Israel has come under renewed international criticism for its surge of settlement activities since a government decision on November 1 to speed up building in response to Palestine joining UNESCO.
More than 310,000 Israelis live in settlements in the occupied West Bank and the number is constantly growing.
Another 200,000 live in a dozen settlement neighbourhoods in east Jerusalem, which was captured by Israel in 1967 and annexed in a move never recognised internationally.
The international community considers all settlements in territories occupied by Israel since June 1967 to be illegal, whether or not approved by its government.