And Israeli officials have insisted nothing will stop them forging ahead with another controversial issue – the much-criticised wall cutting through those Israeli-occupied territories.

The number of settlers living in the occupied West Bank and Gaza Strip rose to 220,100 last year, up from 208,200 at the end of 2001, according to figures compiled by Israel’s Central Bureau of Statistics.

The latest figures continue the upwards trend that saw the settlements’ population grow by five percent in 2001. Overall, Israel’s Jewish population grew by 1.4% in 2002 to 5.1 million.

All settlements on occupied land are considered illegal by the international community but Israel disputes this.

The recent US-backed “road map” peace plan called for a freeze on settlements but observers say they have continued to develop.

Construction continues

In Dubai, the head of the Israeli delegation to the World Bank-IMF meeting told AFP on Tuesday Tel Aviv would press ahead with its controversial wall, which cuts through the Palestinian West Bank.

Controversial wall runs through
Palestinian lands and villages

“We have the intention to build the fence as fast as possible to protect ourselves,” said Meir Sheetrit, minister without portfolio at the Israeli Finance Ministry, “and I hope the United States will not punish us for that.”

US National Security Adviser Condolezza Rice said on Monday after meeting Israeli officials In Washington that the wall – which President Bush has called a problem – did not fit the US view of the region.

The US has hinted it may deduct the cost of the barrier from the $9 billion worth of loan guarantees it has offered Israel.

Israeli defiance

But Sheetrit indicated such measures would fail to dissuade Israel from building the wall.

“Even if they reduce those funds, we are going to do it,” said Sheetrit, a member of the hardline ruling Likud Party who served as justice minister from March 2001 to February 2003.

Dubbed the apartheid wall, the formidable barrier snakes through Palestinian territory, cutting off towns and farms from nearby markets and agricultural lands, and raising fears the Israelis are effectively determining the borders of a future Palestinian state.

Israel says the wall is necessary to protect itself from attacks by Palestinian armed groups.