Israel Order on Settlements Puts Bush on the Spot

JERUSALEM â€”  In the first decisive effort to slow the expansion of settlements in the West Bank and Gaza Strip, the government of Prime Minister Yitzhak Rabin ordered a partial freeze on construction Thursday but permitted continuation of enough housing projects to shelter 35,000 Israelis there in the coming years.

In addition, Rabin’s government indicated a liberal distinction between expendable “political� and defense-oriented “security� settlements by exempting large and controversial settlements east and south of Jerusalem from the construction ban.

The combined decisions put the Bush Administration on the spot. When the previous government of Yitzhak Shamir was in power and energetically expanding settlements, Bush called for a total freeze. Not only has Rabin stopped short of delivering a full cutoff, he will expand settlements that were clearly intended to extend the effective municipal bounds of Jerusalem and to hem in the large Palestinian city of Bethlehem.

Bush, facing difficult reelection prospects, would be risking the ire of Jewish voters in key states like California, New York and Florida should he take a hard line and continue to withhold guarantees for cut-rate loans to Israel. During a visit to Jerusalem early in the week, Secretary of State James A. Baker III said Rabin had promised “severe and substantial� cutbacks in the settlement program.

Rabin took the easiest steps he could in his first major settlement decision. According to an announcement by his housing minister, Benjamin Ben-Eliezer, cancellations come in two forms:

* Discarding contracts that had not yet been signed for 3,136 houses in the West Bank and Gaza.

* Forbidding starts on another 3,545 units for which contracts had been signed but on which no work had begun.

That amounts to a brake on the construction of 6,681 potential houses. Ben-Eliezer estimates that the decision, plus a freeze on hundreds of units within Israel, will save the government about $400 million.

However, Ben-Eliezer said, West Bank and Gaza construction of 8,781 units already under way, even at the earliest stage of foundation laying, will not be stopped. “Construction will continue as usual,� he said flatly.

Work on new roads that bypass Arab towns and villages for the benefit of settlers will be curtailed, Ben-Eliezer added. About 110,000 Israelis live on settlements; 1.7 million Palestinians inhabit the West Bank and Gaza.

Officials named a few settlements that are immune from the construction freeze, including the village of Nahhalin, a Palestinian village that has been surrounded on all sides by settlements.

During his first 10 days in office, Rabin had signaled a change in policy by holding up signing of new building contracts, a move that is now permanent. His government also reserves the right to overturn decisions on expansion made by the previous government.

A battle is brewing within the Rabin government over extending the freeze. Meretz, a key party in the ruling coalition and an opponent of the settlement program, pledged to fight for more cuts.

Settler leaders called the government’s limited ban on new construction “unconscionable� and threatened to go to court to have the decision overturned.

Palestinians expressed disappointment. “All settlement activities are illegal,� spokeswoman Hanan Ashrawi said.

Dovish critics also slammed the decision. “This means the government is going to complete the actions of the previous government,� said Tsali Resef, a member of the Peace Now movement.