Jews given swathe of Arab East Jerusalem for homes

Israeli settlements: Har Homa building plan and fatal shooting by soldiers increase West Bank tension

Israel yesterday approved the construction of a new Jewish neighbourhood on a tree-covered hill at Har Homa in East Jerusalem in the face of Palestinian and international protests. Benjamin Netanyahu, the Israeli Prime Minister, made strenuous efforts to limit the political repercussions of building 2,456 homes for Jews on land captured by the Israeli army in 1967 by announcing more housing for Palestinians.

In sharp contrast to the abrupt opening of a tunnel beneath the Muslim quarter of the Old City of Jerusalem last year, provoking violence in which 61 Palestinians and 15 Israelis died, the government is eager to downplay the significance of the Har Homa project. "It is a civil project which intends to alleviate the housing shortage," said David Bar-Illan, the prime minister's head of communications. "It is good for the Jews. It is good for the Arabs."

Other members of the government were more forthright about the motives for building at Har Homa. Avigdor Kahalani, the Minister of Internal Security, said construction would "make unequivocally clear that Jerusalem is the Jewish capital, and we can build within its municipal boundaries". In response to Palestinian protests he said: "We will do all we can to ensure none of us open fire. If someone opens fire, we will respond."

Overnight an Israeli undercover squad posing as Palestinians killed Mohammed Abdel Haziz al-Halawi, 60, the father of 10 children in the village of Hizma, north of Jerusalem. Another three villagers were wounded by gunshots when they stoned the squad, reportedly under the impression that they were thieves or Israeli settlers. The dead man was shot through the knee and villagers said he bled to death because soldiers stopped his immediate evacuation to hospital. Jibril Rajoub, the head of Palestinian Preventive Security in the West Bank, told Palestinians to stay in their homes to prevent the incident escalating.

Ahmed Tibi, adviser to Yasser Arafat, the Palestinian leader, said: "This is an abominable crime carried out by execution squads, who are acting today as they did at the height of the oppression, as if there were no peace agreements and no political negotiations."

The Israeli civil and security police believe that Mr Arafat has no interest in provoking violence, but may be unable to prevent it. In order to prevent demonstrations the body of Mr Halawi had not been released to his family by late afternoon yesterday.

In order to take the edge off Palestinian anger the government is expected to announce that 3,015 building permits would be issued to Palestinians in Jerusalem to build in the city. The promise will probably have little impact since similar pledges have been made in the past but without result. A poll at the weekend in the daily Ma'ariv found that 46 per cent of Israelis favour building at Har Homa, 29 per cent oppose and 25 per cent do not know.

Har Homa, a long hill between Jerusalem and Bethlehem, was expropriated for the building of a settlement by Israel in 1991. It will complete a line of Jewish settlements in the south of the city and will act as a wedge cutting into centres of Palestinian population inside and outside the city boundaries.

In order to reduce Arab anger Mr Netanyahu spoke by phone with Egyptian President Hosni Mubarak saying, according to a spokesman, that Israel "intends to build about 2,000 housing units for Jews in the Har Homa neighbourhood on land which is largely private and under Jewish ownership". Mr Netanyahu has also implied that the next stage of Israeli withdrawal from the West Bank will depend on a peaceful Palestinian acceptance of the Har Homa project.