Although compensation remains off the agenda for the government, the debate has been spurred by a compensation bill to be presented to the Knesset by Yossi Katz, a Labour MP who believes the settlers should be given money to leave the West Bank and Gaza now, and encouraged to live instead in Galilee, northern Israel, and in the Negev, in the south. Mr Katz says he believes at least half the settlers would accept the money.
Discussion of paying off the settlers has been fuelled by the delay in implementing the first stage of withdrawal from Gaza and Jericho. This delay has been caused, in part, by problems over settlements. It has proved impossible to agree on security arrangements for the communities, which are a focus of violence.
Netzarim, one very isolated settlement in Gaza, has caused particular problems in the talks. The Gaza-Jericho experience has focused minds on the much bigger problem presented by settlements in the West Bank. 'There are one hundred Netzarims in the West Bank,' says Yossi Alpher, director of the Jaffee Centre for Strategic Studies in Tel Aviv. 'It seems clear now that even if agreement is reached for withdrawal from Gaza and Jericho it will be impossible to apply it to the West Bank.
'The number of settlements there will allow only very flimsy cosmetic redeployment. The presence of settlers will continue to be a focus of friction and violence, presenting a huge obstacle. The debate about evacuation is only just beginning but is building up and will continue to do so.' The compensation bill could be as high as dollars 10bn (pounds 6.7bn), according to some estimates, and Israel would be certain to request international help to pay it.
However, the coalition government refuses to discuss compensation publicly for fear of enraging the right, which recalls memories of Yamit, the settlement in the Sinai evacuated after the Israel-Egypt peace accord of 1979. For now, the terms of the peace agreement do not demand that the issue be raised. These terms say that settlements will remain in place for five years of Palestinian self-rule.
Only then, when the final status of the lands is decided, does evacuation become an option. To talk about compensating some settlements now would be to disclose a readiness to hand over some or all of the land in the final-status talks, which would be to declare a bargaining position.
However, some liberal commentators in Israel believe that the government may be obliged to shorten the interim phase of the handover, to allow discussion of settlements to start earlier than planned.
The government appears content for discussion about compensation to begin in the media, in the Knesset, and in academic circles, suggesting that efforts are under way to prepare public opinion for another taboo to be broken. 'It is true the debate is beginning. It is in the air. That shows it is on the public agenda,' said a senior government source.
As settler anxiety shows itself, Yitzhak Rabin, the Prime Minister, is attempting to present settlers to the Israeli public in a different light. He announced last week that four times as many troops were necessary to ensure security in the occupied territories as were needed on the northern border.
This disclosure was partly designed to show the public the cost of protecting 3 per cent of the Israeli population, living on land that may one day have to be handed back. Mr Rabin said on Monday: 'Twice each day in Judea and Samaria alone there are more than 500 military escorts for schoolchildren. If only some of this force could be used to initiate operations against the terrorists.'
This week the Jewish National Fund, a quasi-government agency, announced plans to build 26 new communities in Israel proper near the Green Line. This was interpreted as an effort to lure settlers to move.