Israel gave settlers illegal $6.5m

Israel has built Jewish settlements on land annexed in 1967

Israel's Housing Ministry broke the law to spend nearly $6.5m on illegal settlements in three years, says an annual report by the state auditor.

Comptroller Eliezer Goldberg said the Housing Ministry had funded settlements on land whose ownership was in dispute.

The report said money was sent without approval by the cabinet or defence ministry - a legal requirement.

Israel was expected to uproot or stop work on several settlements under the US-backed "roadmap" for peace.

But according to the Mr Goldberg's report, funds were sent to the unauthorised settlements even as the Israeli army was "investing resources to track down and demolish illegal construction".

Funding freeze

The Housing Ministry in Israel's coalition government is run by the radical right-wing National Religious Party, which believes the West Bank and Gaza belong to a biblical Jewish homeland.

The comptroller's inquiry showed the ministry approved 77 building contracts in 33 West Bank areas between January 2000 and June 2003.

Eighteen of these settler outposts were unauthorised constructions, according to the report, and they received roughly $4m of the total sum of almost $6.5m spent.

The money was sent even as the Israeli military was "investing resources to track down and demolish illegal construction", Mr Goldberg wrote.

A review of Mr Goldberg's initial findings prompted Israel's attorney general to order a freeze on government funding for settlement construction last month.

The freeze was lifted after a system was approved to monitor funding.

'Government policy'

According to the Justice Ministry, the Housing Ministry could face a criminal investigation into its allocation of funds.

The Housing Minister, Effie Eitam, has promised "every shekel that comes from the government will be transferred to legal activities".

A spokesman for anti-settlements group Peace Now said the auditor's report proved illegal settlement-building was not the work of settlers alone, but was "government policy".

There are around 140 Jewish settlements built on land occupied by Israel after the 1967 war.

International law deems these constructions illegal; Israel insists it has a right to build them.

In February, the Israeli government approved a $22m budget for creating and maintaining settlements on occupied land.

Last month, US President George W Bush reversed a long-standing American position on the illegitimacy of settlements, saying Israel should be allowed to keep "major Israeli populations centres" on occupied land.