Construction Booming in Occupied West Bank : Settlements: Despite Bush’s ire, projects are moving ahead. Some new residents will be families from U.S.

Dust rose up against the sunset as a pile driver smashed the flinty limestone into bits and leveled the hill to make way for new houses. An Israeli settlement that not much more than a year ago appeared to be failing was being revived.

Dozens of modest homes were under construction, and the settlers, members of the extremist anti-Arab Kach movement, would provide at least some of the tenants.

“We expect 26 Kach families from America to come and fill some of these homes,” said Lenny Goldberg, a Kach militant. “We are giving a transfusion to this place.”

This is just the kind of development that has riled President Bush, who is on a campaign to stop Israel’s colonization of the disputed West Bank and Gaza Strip.

But the pace of construction is exploding in the occupied land, a project that reflects the relentless drive of Prime Minster Yitzhak Shamir and his housing minster, Ariel Sharon, to blanket the territory with Israeli communities.

No one in Israel seems to know just how much money is being spent; the ministry does not have to account for its programs to the Parliament in detail. But armed with a $2-billion yearly budget, Sharon evidently has resources to spare for West Bank and Gaza development, despite the need to shelter Soviet immigrants who are flooding Israel proper.

Sharon was recently criticized by Michael Bruno, retired head of the Bank of Israel, for squandering money on projects that have little value to immigrants or anyone else. Bruno recommended that the housing budget be cut.

In Bush’s view, the United States indirectly subsidizes such spending. Because of the settlements, the President is threatening to withhold guarantees for $10 billion in new loans that Israel wants to fund housing and jobs for the Soviet Jews. The Defense Ministry, which oversees the West Bank and Gaza, is also asking for $700 million in additional military aid. Altogether, Israel already receives more than $3 billion in economic and defense assistance each year.

The use of American money to benefit the Kach movement may raise eyebrows even in Congress, where Israel usually enjoys uncritical support.

At least a dozen Kach families, members of a Kach “seminary,” live in Tapuah. The group, which favors the expulsion of Arabs from both Israel and the occupied lands, is the creation of the late Meir Kahane, founder of the Jewish Defense League in the United States. Kahane was assassinated in New York last year.

Kach has been linked with violent attacks on Arabs in Israel, and the movement was banned by Israel’s Supreme Court from putting up candidates in the 1988 general elections. Successive governments had barred Kach from settling in the occupied land.

But last year, its members say, Kach received permission to move into Tapuah, a sleepy community that for much of its 13-year history housed mainly Yemenite Jewish families. The prospects for survival of the hilltop settlement seemed slight, and many Yemenites had fled, leaving empty houses.

“This is our community now,” said Goldberg, who was wearing a pistol on his belt. “Even the police would think twice before coming here.”

(A spokesman for the Defense Ministry said that Kach members needed no special permission to move to Tapuah.)

Extensive building projects are under way throughout the West Bank. At Efrat, a bedroom community south of Bethlehem, ground is being cleared for new houses that are being sold with government-subsidized mortgages. A new highway is being rushed to a finish to link the town with Jerusalem and bypass Palestinian towns and villages. Land for Efrat’s expansion was taken from Palestinian residents of Artas, an adjacent village.

At Medzad, a wind-blown settlement that shelters 30 religious families, foundations are being put down for houses that as yet have no tenants; the other day, seven new mobile homes were delivered.

Last month, army trucks escorted mobile homes to a nationalist Jewish seminary in Hebron. A Defense Ministry spokesman said the housing will provide temporary shelter for students until a permanent building is renovated.

The Parliament, in deference to Secretary of State James A. Baker III’s visit to Jerusalem last week, put off a committee vote on a $6.4-million grant for settlements.

Observers of the mushrooming projects say the goal has little to do with the need for shelter and much to do with an effort by the government to block avenues to compromise in proposed peace talks. Meron Benvenisti, an expert on West Bank and Gaza affairs, pointed out that, traditionally, settlements mushroom any time a peace plan is under consideration.

“And it doesn’t make any difference which government is in power. You can expect a concerted effort to demolish the process with facts constructed on the ground,” he said.

He recalled that in 1969, when Secretary of State William P. Rogers promoted a peace plan and the Labor Party was in power in Israel, Jerusalem City Hall looked for places to do some quick construction. “We ended up adding three floors to four-story housing on French Hill,” said Benvenisti, a city official at the time.

French Hill is in an area of Jerusalem annexed by Israel after the 1967 Middle East War.

In 1974, partial disengagement from the Sinai desert after war with Egypt triggered accelerated building in the West Bank. Massive expropriations of land followed the 1979 peace treaty with Egypt, Benvenisti recalled. The Likud Party had, by then, taken over from Labor. “These actions were meant to take territory out of future negotiations,” he said.

The Baker round of shuttle diplomacy has been the occasion for new building, as well as expropriations. Sharon announced this week that 15,780 houses for Israelis have been built on occupied land since April, 1990, including 3,000 mobile homes for Soviet immigrants.

Every effort will be made to match the pace during the coming year, ministry officials said.

After one of Baker’s visits last spring, Shamir dismissed U.S. complaints that settlements block peace. “There is no relation between the settlements and negotiations between us and the Arabs,” he told Israeli television. “It’s an internal Israeli matter.”

About 100,000 Israelis live in the West Bank and Gaza among 1.7 million Palestinians.