On Monday, Israeli officials confirmed that Israel was building a police headquarters and "other facilities" in what it calls the E-1 area, extending from East Jerusalem to the settlement of Maali Adomim, the largest in the West Bank.
In addition to 3550 settler units, the planned development would include a road network, six hotels and a park.
Non-Jews would not be allowed to live or buy land in the settlement.
"This project has received all the necessary authorisation and work on the foundation began several days ago," an unnamed official in the Israeli prime minister’s office has been quoted as saying.
The decision to start building was taken by the Higher Zoning Council for Settlements, an annex to the Israeli Army’s civil administration.
Israeli officials contacted by Aljazeera.net denied that the construction of the police headquarters was connected to the large settlement project.
"We are only planning to build a police headquarters and some roads, there has been no decision to start working on the settlement itself," said Mark Regev, spokesman for the Israeli foreign ministry.
Regev said that Israel would start building sooner or later in order to create "Jewish demographic contiguity between Jerusalem and Maali Adomim."
"This is consistent with the pledges President Bush gave to Prime Minister Sharon a few years ago."
"They are stealing our land in broad daylight. They are killing any remaining possibility for the creation of a viable Palestinian state"
Palestinian Authority minister
During Sharon's visit to the US in 2004, Bush said demographic realities ought to be taken into consideration in a final settlement between Israel and the Palestinians.
Since then, Israel has interpreted Bush’s statements as giving it carte blanch for unrestricted expansion of Jewish settlements in the West Bank, especially in the vicinity of Jerusalem.
Israel calls the expansion "natural growth".
However, Palestinian officials say that Israel is embarking on a new phase of "large-scale theft of our land".
Khalid al-Qawasmi, the outgoing Palestinian Authority (PA) minister of local governance, said: "They are stealing our land in broad daylight. They are killing any remaining possibility for the creation of a viable Palestinian state. And they are doing it as America and Europe are watching passively," said
He told Aljazeera.net that the PA was in contact with the Quartet, which is made up of the UN, US, EU and Russia, over the issue, adding that if the international community allowed Israel to carry out the new settlement expansion plan, the two-state solution would be doomed.
Al-Qawasmi accused Israel of deceiving the international community.
"They say one thing to the foreign media, but does the opposite on the ground," he said.
Israel has been saying for years that it intends to build settlements in the area between Jerusalem and Maali Adomim.
The settlement, says Khalil Tufakji, a settlement expert at the Arab Studies' Centre in East Jerusalem, will cut off Jerusalem from its Arab surroundings and kill any chance for a viable Palestinian state in the West Bank.
Olmert says Ariel is an
inseparable part of Israel
"This will also effectively cut off the southern West Bank (the Hebron and Bethlehem regions) from the central and northern regions," Tufakji said.
Meanwhile, Ehud Olmert, the acting Israeli prime minister, has said he will keep Ariel, the second largest settlement in the West Bank, "within Israel" in any prospective settlement with the Palestinians.
"Ladies and gentlemen, I want to be clear on this: The Ariel block will be an inseparable part of the State of Israel under any situation," he told settlers and supporters at the settlement on Tuesday.
Ariel was built in the heartland of the West Bank south West of Nablus.
Olmert visited the Ariel to inaugurate a water main that bypasses Palestinian population centres, which Israeli officials say underscores his determination to annex the settlement to Israel.