The Israeli government has plans to build at least 73,000 new homes for Jews in the occupied West Bank, the anti-settlement group Peace Now says. If the plans are implemented in full it would double the number of settlers in the West Bank outside east Jerusalem, according to the Peace Now website. Israeli officials said the plans referred to potential construction and only a small number had been approved. Continued settlement work is seen as a major barrier to Palestinian statehood. Correspondents say the information indicates Israel's next coalition government, currently in the process of being formed by Likud leader Benjamin Netanyahu, has a wide choice of projects for settlement expansion. If coalition negotiations force him into a strongly pro-settlement right-wing government, the plans could put him in collision course with the new US government, they add.

The Palestinian Authority, which has been engaged in a revived negotiated process since November 2007, has warned Israel that it must choose between peace and settlements, but it cannot have both. Successive Israel governments have paid lip-service to international agreements with the Palestinians to freeze settlement activity. However settlement population has grown rapidly, as the governments have refused to curb what they call "natural growth" of the settlements - growth within what Israel defines as the boundaries of established settlements. Peace Now said in its report that there are plans for huge construction to double the size of some settlements including Beitar Illit, Ariel, Maale Adumim and Efrat settlements. "The completion of these projects will make the plan of creating a Palestinian state next to Israel totally unrealistic," Peace Now head Yariv Oppenheimer said in a radio interview. Housing ministry spokesman Eran Sidis insisted in an interview with the AFP news agency that the plans "refer only to potential construction" and "in practice only a very small part of these urbanism projects are implemented".

All Jewish settlements in the Palestinian territory are regarded as illegal under international law, although Israel disputes this. More than 400,000 Jewish settlers live in the West Bank and East Jerusalem, areas which were captured by Israeli in the 1967 war. The Obama administration has pledged to pursue Palestinian statehood swiftly in negotiations. It is yet to endorse the Bush administration position that Israel should keep hold of large settlement blocs in the occupied territories.