ISRAEL: Palestinian leaders yesterday warned that the two-state solution to the Middle East conflict was in jeopardy after a report that the US had shifted its long-term opposition to settlement construction and was ready to countenance building inside existing Jewish settlements in the West Bank.
Such an about-face would be in direct contradiction to the moribund road map peace plan which is sponsored by the US and has a settlement freeze as one of its central planks.
Reacting to the report of a policy shift, published in the New York Times, Palestinian Prime Minister Mr Ahmed Qurie said: "I can't believe that America is now saying that settlement expansion is all right.
"This will destroy the peace process."
Cabinet Minister Mr Saeb Erekat warned that such a move "destroys the two state solution," which envisages an independent Palestinian state in the West Bank and Gaza Strip, alongside Israel, as the solution to the conflict. According to the report, the US would still oppose settlement building in unpopulated areas. The New York Times reported that Washington had altered its long-held opposition to settlements to help embattled Prime Minister Mr Ariel Sharon.
The Israeli leader faces strong opposition within his ruling Likud party to his "disengagement" plan, which would see Israel withdrawing from Gaza and dismantling all 21 settlements there, as well as another four in the northern West Bank.
Some observers suggested the move could also help President Bush in his re-election campaign, among Jewish voters as well as evangelical Christians who back Israel and are a key part of his support base.
Last week, the Likud central committee handed Mr Sharon a stinging rebuff when it voted to bar him from talking to the centre-left Labour Party, which he would like to bring into his coalition in order to implement his withdrawal plan.
US officials confirmed to the Associated Press yesterday that the Bush administration was not opposed to building within the major settlement blocs, as long as they are not expanded.
A team of US experts is expected to visit Israel next month for talks on freezing settlement expansion and the evacuation of illegal outposts.
Meanwhile, in a signal that Mr Sharon is trying to ignore the stiff opposition in his party to his withdrawal plan, a government body set up to co-ordinate compensation for settlers who will be evacuated from their homes, began operating yesterday.
The prime minister's office said discussions with settlers had already begun.
Meanwhile, a hunger strike by Palestinian security prisoners in Israeli jails has expanded to include 3,000 prisoners - double the number that began striking over conditions a week ago.