OCCUPIED JERUSALEM, August 23 (IslamOnline.net & News Agencies) - Israel has allowed construction of 530 new settler houses in the West Bank as Washington signaled it would accept growth in Jewish settlements in the occupied Palestinian territory, political sources said Monday, August 23.

A report in Monday's Yediot Aharonot daily said more than 530 new houses would be built in settlements including Haradar and Har-Gilo lying close to occupied Jerusalem and the West Bank town of Bethlehem after adjoining land had been "rezoned".

The announcement comes after it emerged that Washington had given its tacit approval for expansion of existing Jewish settlements allegedly to accommodate "natural growth", in apparent contradiction of the US-backed roadmap peace plan which calls for a freeze on all settlement activity.

Yediot reported that a total of 2,167 construction permits for West Bank houses had been issued this year even though only 908 houses were put on the market last year.

It means that the number of homes constructed in the West Bank this year will account for 12 percent of the total even though only 3.6 percent of the Israeli population live there.

Prime Minister Ariel Sharon last week approved the construction of around 1,000 new homes in four of the largest of the West Bank settlements in a move which was widely interpreted as a bid to placate opponents of his plan to pull troops and settlers out of the Gaza Strip.

The international community considers all Israeli settlement in the occupied territories to be illegal.

Palestinians and Arabs reacted with anger to the fresh Israeli project. Palestinian Prime Minister Ahmed Qorei accused Israel of escalating tensions, saying the move would wreck the roadmap peace plan.

"While it is talking about evacuating settlements in Gaza, it is expanding all settlements in the West Bank," Qorei was quoted by press reports as saying.

"This will not bring about stability nor will it bring peace."

Palestinians, who fear uprooting the Gaza settlers is a cover for strengthening Israel's hold on bigger West Bank lands, said the United States was tearing up its own peace "road map" -- a blueprint for a Palestinian state.

"For the United States to take such positions ... can only damage the peace process, if it exists, and damage the whole situation and make it more difficult," Arab League Secretary-General Amr Moussa told reporters in Cairo.

According to the internationally-backed roadmap plan, Israel is obliged to halt all settlement activities in the occupied Palestinian territories where around 245,000 Jewish settlers live.

The roadmap has made no progress since it was launched last year amid accusations by the Palestinians that the Israelis are blatantly violating their commitment to freeze settlement activity.

While backing the roadmap, US President George W. Bush has claimed that the size of some of the largest settlements meant it was "unrealistic" to expect Israel to withdraw totally from the West Bank in any final settlement. The statements had drawn outrage across the world.

"Any agreement or green light for enlarging or expanding the settlements is an act that not only does not serve but is a total departure from the peace process," Qorei said.

In the past, Washington has objected to all settlement construction.

The Palestinians have said the shift threatens prospects for peace and demanded a clarification from Washington, according to Reuters on Monday.

They object to all settlements in the West Bank and Gaza, where they hope to establish an independent state.

Israel occupied the areas in the 1967 Mideast war. The Jewish settlers live in Jewish settlements, the vast majority of them in the West Bank.

The US support for the Israeli settlement expansion are to increase anti-American sentiments among Arabs in general and Palestinians in particular.

A senior US administration official, commenting on Israel's plan to build 1,000 more settler homes, said on Saturday: "There is some flexibility there."

While the White House denied any official change in the US stance, an official said efforts were under way to clarify with the Israelis what "settlement activity" means, Reuters said.

Based on this new understanding, officials said Washington could agree to new construction provided it did not take place outside the boundaries of existing settlements.

This could mean that all plans to leave settlements are thus under wraps with new units are being built there.

Hundreds of thousands of Palestinian fled their homes or were forced out of them on the creation of Israel.

Their descendants now make up a Palestinian refugee community of some five million in the West Bank, Gaza and abroad who have kept alive the dream of reclaiming homes in what is now Israel under any peace accord.

Those who stayed in their villages when Israel was created on Palestinian lands are now described as Israeli Arabs.

Israel rejects the "right of return" and wants refugees resettled in a future Palestinian state.

Palestinians and Israeli Arabs commemorate Naqba Day, or Catastrophe day, on May 15 - the official date of Israel's creation according to the western calendar.

In events on the ground, a 21-year-old Palestinian man was killed by Israeli gunfire in Rafah in the southern Gaza Strip.

Hazem Abu Zuri was hit in the chest after Israeli troops moved into the area, medical sources said.