Israel expands subsidies for settlements

Israel expanded its list of settlements eligible for government subsidies Sunday, a move that came just days after the resumption of long-frozen peace talks and drew quick Palestinian condemnation.

The Israeli cabinet approved housing subsidies and loans for more than 600 Israeli communities it deemed "national priority areas," expanding an earlier list.

These include poor towns in Israel's outlying areas, but also dozens of settlements in the West Bank.

Israeli settlements on land occupied after the war of 1967 -- and which today house more than 500,000 Israelis -- are deemed illegal by the United Nations. President Barack Obama reiterated in June of 2009 that "the United States does not accept the legitimacy of continued Israeli settlements," and the administration spent two years pressing for Israel to halt such construction in order to restart peace talks -- but eventually retreated from that demand as Israeli Prime Minister Benjamin Netanyahu stood firm.

Palestine Liberation Organization Chairman Mahmoud Abbas has resumed negotiations with Israel, his goal being the establishment of a Palestinian State on the 1967 lines, comprising the West Bank and Gaza with East Jerusalem as its capital.

The Israeli anti-settlement group Peace Now said the list approved Sunday increased the number of settlements eligible for subsidies from 85 to 91, virtually all in areas that Israel would probably have to evacuate to make way for a Palestinian state.

Lior Amihai of Peace Now said three of the settlements added to the list had begun as rogue outposts that were established without formal government consent and then were legalized retroactively.

Hanan Ashrawi, a member of the Palestinian negotiating team, said Sunday's cabinet vote confirms Palestinian suspicions that Israel is engaging in protracted negotiations but has no intention of reaching a credible deal.

"This is exactly what Israel wants — have a process for its own sake and, at the same time, have a free hand to destroy the objective of the process," she said. "This will have a destructive impact [on the talks], and it seems to me it's up to the sponsors, the United States and the international community, to make Israel desist immediately."

Israeli government spokesman Mark Regev said that in the case of settlements, any housing or infrastructure subsidies require additional government approval.

Four Israeli ministers abstained from the cabinet vote, citing the potential harm to negotiations.

"To include settlements that until recently were illegal, when it's doubtful that they will remain a part of Israel, and to disproportionately invest in them — I think it is not the time, politically speaking and socioeconomically speaking," Environmental Protection Minister Amir Peretz told Israel Radio.

Peace negotiations began in Washington last week and will continue in Jerusalem next week. The United States wants a deal on the terms of a Palestinian state within nine months.

As part of the talks, Israel is to free 26 long-held Palestinian prisoners on Aug. 13, said chief Palestinian negotiator Saeb ­Erekat. It would be the first of four groups of veteran prisoners — totaling 104 — to be freed over the next few months.

The release is part of a U.S.-brokered deal that cleared the way for the resumption of talks.

Al Jazeera and The Associated Press