ISRAEL has sought to play down a growing international furore over proposals to build more Jewish settlements in the West Bank and Jerusalem.
The US and several European nations have censured the approval of 3000 additional homes on land where they consider Israeli construction to be illegal.
The plan was announced less than 24 hours after Palestine was recognised as a non-member state by the United Nations General Assembly, with the US and Israel among those voting against.
"Criticism between friends is legitimate," Israeli Finance Minister Yuval Steinitz said at a Jerusalem press briefing.
"Our friends do understand, even if they have to say they don't agree with us - and maybe they really don't agree to one or another step - that it's natural that there is an Israeli response."
Israel's decision includes preliminary steps towards building more Jewish housing in an area known as E-1 between Jerusalem and the West Bank settlement of Maaleh Adumim. The US and Europe have pressed Israel for years not to proceed with development there, because it would split northern and southern areas of the West Bank and may cut Palestinians off from east Jerusalem, which they seek as their state's capital.
Mahmoud Abbas, president of the Palestinian Authority, denounced the construction plan at his office in Ramallah, telling reporters: "If Israel continues with its settlements, it definitely doesn't want a peace agreement."
His envoy to the UN called for international condemnation of Israel's actions in letters sent to Secretary-General Ban Ki-moon and to the presidents of the Security Council and General Assembly.
Building in the E-1 area "would be especially damaging to efforts to achieve a two-state solution", State Department spokesman Mark Toner said in a statement. White House spokesman Jay Carney called the plan "counterproductive".
The British and French governments lodged sharper protests, formally summoning Israeli ambassadors to express their concerns. Australia followed suit.
Germany, where Israeli Premier Benjamin Netanyahu is due to travel, and Brazil were among other countries lodging protests.
Mr Netanyahu's office said on Tuesday that Israel would continue with its settlement plans "even in the face of international pressure".
Deputy Foreign Minister Danny Ayalon told Army Radio that during talks in Germany and the Czech Republic, "we will hold discussions and explain and sometimes agree to disagree".
The Jerusalem District Planning Committee is planning to hold a scheduled hearing in two weeks on another housing project approved for Ramat Shlomo, an area of the city seized by Israel in the 1967 Middle East war and also claimed by Palestinians. US Vice-President Joe Biden criticised that plan when it was announced two years ago while he was visiting Jerusalem.
Israel's shekel rebounded on Wednesday, recouping the loss it posted on Tuesday on concern that the settlement dispute may hurt the economy.
The currency rose 0.3 per cent to 3.8154 per US dollar in Tel Aviv. Exports comprise about 40 per cent of the Israeli economy's output, and Europe is one of its largest markets.
"I'm sure the excellent economic co-operation between Israel and Europe, and Israel and the US, won't be harmed" by the settlements dispute, Mr Steinitz said.
Frequently Asked Questions about this Article…
What settlement decision did Israel announce and how many homes were approved?
Israel announced approval of about 3,000 additional homes and took preliminary steps toward building more Jewish housing, including actions in the E-1 area between Jerusalem and the West Bank settlement of Maaleh Adumim.
How did the international community react to Israel's settlement plans?
The US and several European nations censured the approvals, calling some construction illegal; Britain and France formally summoned Israeli ambassadors, and countries including Australia, Germany and Brazil lodged protests. US and UN officials also criticised the plans.
What is the E-1 area and why is development there controversial for investors to follow?
E-1 lies between Jerusalem and Maaleh Adumim. US and European governments say building there could split northern and southern West Bank areas and cut Palestinians off from east Jerusalem, making it politically sensitive and potentially damaging to the two-state solution.
Could the settlement dispute affect the prospects for a two-state solution?
Yes. The US State Department said building in E-1 would be 'especially damaging' to efforts to achieve a two-state solution, and Palestinian leaders have said continued settlement expansion undermines peace efforts.
How have Israeli officials responded to international criticism of the settlement plans?
Israeli officials played down the furore: Finance Minister Yuval Steinitz said 'criticism between friends is legitimate,' and Prime Minister Netanyahu's office said Israel would continue with settlement plans 'even in the face of international pressure.' Deputy Foreign Minister Danny Ayalon said officials will explain their position and 'sometimes agree to disagree.'
What economic or market impacts were reported that everyday investors should know about?
The shekel rebounded after an earlier dip tied to concerns the dispute might hurt the economy, rising 0.3% to 3.8154 per US dollar. The article notes exports make up about 40% of Israeli output and that Europe is one of Israel's largest markets, so political tensions could affect trade and currency-sensitive investments.
Are there upcoming planning steps investors should watch related to Jerusalem housing projects?
Yes. The Jerusalem District Planning Committee planned a hearing in two weeks on a housing project for Ramat Shlomo, an area seized in 1967 and also claimed by Palestinians—an item that has previously drawn criticism from international figures.
Should investors expect diplomatic protests to halt Israel's settlement plans?
Based on the article, Israeli leaders indicated they would continue with settlement plans despite international pressure. While diplomatic protests have been strong, Israeli officials publicly signalled persistence, so investors should monitor developments closely rather than assume protests will stop the projects.
Call 1300 880 160
Start a chat
Schedule a call
