Netanyahu defies Obama on Israeli settlement freeze

JERUSALEM, (Reuters) – Israeli Prime Minister  Benjamin Netanyahu yesterday rebuffed U.S. calls for a full  settlement freeze in the occupied West Bank and vowed not to  accept limits on building of Jewish enclaves within Jerusalem.

Netanyahu’s defiant stance set the stage for a possible  showdown with U.S. President Barack Obama, who, in talks with  the new Israeli prime minister in Washington last week, pressed  for a halt to all settlement activity, including natural growth,  as called for under a long-stalled peace “road map”.

“The demand for a total stop to building is not something  that can be justified and I don’t think that anyone here at this  table accepts it,” Netanyahu told his cabinet, referring to  Jewish settlements in the West Bank, according to an official.

Netanyahu said Israel had no plans to set up any new West  Bank settlements. But he told Obama, according to the official,  that his government “does not accept limitations on building”  within what Israel defines as its capital, the Jerusalem  municipality, an area that includes Arab East Jerusalem and  parts of the West Bank captured in a 1967 Middle East war.

Palestinians want their own state in the West Bank and the  Gaza Strip with its capital in Jerusalem. Settlement building in  the city is a particularly sensitive issue for both sides.

“What we are interested in seeing is that Israel should  implement its obligations under the road map, which includes  halting settlement activity and expansion in all its forms,”  Public Works and Housing Minister Mohammed Shatayyeh said.

He added that if Israel wanted to show it was serious about  peace talks with the Palestinians it should stop providing  utilities to settlements and deny them state funding.

Netanyahu’s comments reaffirmed a position he took in his  bid for the premiership in a February election. By natural  growth, Israel refers to construction within the boundaries of  existing settlements to accommodate growing families.

Obama was expected to prod Netanyahu and Palestinian  President Mahmoud Abbas to resume long-stalled peace talks  during a major speech in Cairo early next month.

Abbas has ruled out restarting those talks until Netanyahu,  whose right-leaning government took office on March 31, commits  to a two-state solution and halts settlement expansion.

Obama has surprised Israel with his activism on the  settlement issue, but it is unclear how much pressure he will  put on Netanyahu to freeze construction entirely, Israeli and  Western officials said. Former President George W. Bush called  for a freeze but building continued largely unchecked, Israeli  anti-settlement advocacy groups say.

Half a million Jews live in settlement blocs and smaller  outposts built in the West Bank and Arab East Jerusalem, all  territory captured by Israel in the 1967 Middle East War.

The World Court says all are illegal. The United States and  European Union regard them as obstacles to peace.

Palestinians see the settlements as a land grab meant to  deny them a state in the West Bank and the Gaza Strip.

Mark Regev, a spokesman for Netanyahu, said the fate of  existing settlements should be decided in negotiations with the  Palestinians. “In the interim period, we have to allow normal  life in those communities to continue,” he said.

Netanyahu has so far balked at committing to talks with the  Palestinians on territorial issues, including settlements.

A senior Israeli official, speaking on condition of  anonymity, said Netanyahu’s government hoped to sidestep U.S.  pressure by committing to uproot smaller hilltop outposts built  without official authorisation, a step also set by the road map.

“Moving on outposts is relatively easy” compared to freezing  the growth of larger settlements, which Israel wants to keep as  part of any future peace deal, the Israeli official said.