A senior ally of Ariel Sharon has given the most explicit indication yet that the Israeli Prime Minister envisages the 425-mile separation barrier as the border between Israel and a future Palestinian state.
Government spokesmen frequently claim that the barrier was built solely for security reasons and could be removed or rerouted.
But the Justice Minister, Tzipi Livni, who is helping prepare the programme of Mr Sharon's new Kadima party, told a legal conference in Caesarea: "One does not have to be a genius to see that the fence will have implications for the future border. This is not the reason it was built, but it could have political implications."
The Palestinian leadership said this was evidence that the barrier, which puts 8 per cent of the West Bank, including the major settlement blocs, on the Israeli side, was an effort to pre-empt free negotiations on any final peace deal.
Saeb Erekat, the chief Palestinian negotiator, said: "This is a very dangerous development and undermines the chances of permanent status negotiations. This proves Israel wants to dictate and not negotiate."
But leaders of Likud, the main hard-right party badly weakened by the desertion of Mr Sharon, are likely to attack the remarks as implying that the Prime Minister is ready to concede up to 90 per cent of the West Bank, including the settlements east of the barrier, unilaterally or in negotiations with the Palestinians.
A member of Israel's Supreme Court, Mishael Cheshin was said by the daily Haaretz to have cited the security arguments used by government lawyers facing challenges to the barrier route and told Ms Livni at the conference: "That is not what you have contended in court."
The high court decided two parts of the barrier should be brought closer to Israel's pre-1967 borders than it had planned. Other sections - especially that which threatens to encircle Jerusalem and cut the occupied Arab east of the city from the West Bank - still present massive stumbling blocks to negotiated settlement with the Palestinians. Haim Ramon, another prominent member of Mr Sharon's new party who deserted from Labour, has already said the section around Jerusalem was built for political rather than merely security reasons.
He said the route "also makes Jerusalem more Jewish", adding: "The safer and more Jewish Jerusalem will be, it can serve as a true capital of the state of Israel."
The Palestinians have made it repeatedly clear that east Jerusalem, seized by Israeli in the 1967 war, must the capital of any future Palestinian state.