ERUSALEM (AP) — Israel's effort since the 1967 Mideast war to fill the West Bank and Gaza Strip with Jews has grown from the scattered actions of zealous squatters into a network of 142 towns and villages that house nearly 240,000 people.
Now that Israel plans to spend some $2 billion to dismantle just 25 of the settlements — for which U.S. aid has been requested — it raises the question of how much money has been poured into populating these biblical lands with Jews, and exactly where it came from.
The official answer: No one knows.
Vice Premier Shimon Peres estimates Israel has spent about $50 billion since 1977, when the hard-line Likud government took over from his Labor party. Other former finance ministers and government officials don't discount a price tag — commonly floated but never documented — of $60 billion.
"No one eye in the world saw the whole picture," says Labor Party lawmaker Danny Yatom, a confidant of the late Prime Minister Yitzhak Rabin. "Most of it is not camouflaged, but it is not possible to connect A to B to C to D to E to F to G."
Calculating an exact figure is impossible because much of the building was financed through winks and nods, an opaque state budget and secret military spending that in some cases violated Israel's laws and undercut international peacemaking efforts, according to official Israeli inquiries as well as Associated Press interviews with past and present officials, settlers and their opponents.
Among the methods used, the interviews show, were government subsidies, shadowy land deals, loopholes in military spending, and an auditing bait-and-switch in which U.S. aid was used to free up billions of dollars for spending on the settlements formally opposed by the United States.
Even today, with preparations under way for demolishing 21 settlements in Gaza and four in the West Bank, housing and roads continue to be built in West Bank settlement blocs Israel wants to keep in a final peace deal with the Palestinians. This contradicts the internationally backed "road map" peace plan to halt settlement expansion.
And a government-commissioned inquiry in March revealed similar methods were used to build and expand dozens of unauthorized West Bank "outposts" — set up as flag-showing exercises and usually consisting of a handful of people in mobile homes.
It found widespread government complicity in establishing more than 100 such outposts, and the inquiry's chief, former prosecutor Talia Sasson, called the government's actions "a blatant violation of the law."
Last year, the funding of the outposts came in for sharp criticism from the State Comptroller, the government's main watchdog. It found at least two cases where the Housing Ministry funded outposts that the military had ordered demolished.
Now settler leaders, eager to embarrass Prime Minister Ariel Sharon over his Gaza withdrawal plan, say they had official backing in all their ventures.
"Let me be very, very clear: It's not a question of dark-of-night grabs, or hide-and-seek or deceit on anyone's part," said lawmaker Yitzhak Levy of the pro-settler National Religious Party, who headed ministries in Likud and Labor governments.
"It is government policy," he said.
The settlements started after 1967 under Labor governments, which sought to confine them to border areas they considered necessary for national security. But then Likud came to power in 1977, claiming a God-given right to the whole West Bank and Gaza Strip. The chief settlement advocate was Ariel Sharon, the former general who — now as the prime minister — has ordered the Gaza pullback.
Using his Cabinet posts between 1977 and 1992 — agriculture, defense and housing — he doled out government grants, low-cost loans and tax breaks to settlers. He also gave birth to the idea of advertising the enclaves as bedroom communities just minutes from Israeli urban centers.
Some settlements close to towns in Israel proper were subsidized by giving the inhabitants tax cuts, cheap mortgages and grants of between $6,900 and $57,000 — perks ordinarily reserved for outlying areas.
Maaleh Adumim, the largest settlement with about 30,000 people, received this "priority" status even though it is just three miles from Jerusalem. So did Elkana, an affluent settlement five miles from Israel's economic hub, Tel Aviv.
Settler leader Adi Mintz said even some of the settlers thought the tax breaks for bedroom communities were unfair.
The state also picked up as much as half the tab for hooking up utilities. And pro-settler lawmakers fought to control key ministries such as Construction and Housing, National Infrastructure, and Transportation so they could direct money to settlements.
"When I was at the Ministry of Housing, I set the objective of expanding (settlements in) outlying areas," said lawmaker Levy.
The classified defense budget further propelled expansion, funding troop deployments to guard settlements, and building fences and wide roads for settlers living among more than 2 million Palestinians who adamantly oppose their presence.
The estimates of $50 billion to $60 billion do not include the 32 settlements built on the Golan Heights which Israel captured from Syria in 1967, and whose native populace is Druze, not Palestinian.
In the West Bank, entire settlements were built under the guise of military or security needs, even though they weren't formally authorized by the government, according to Yatom, a former West Bank military commander.
A government official conceded that some uses of military funds "in hindsight ... aren't legal and shouldn't have been done." He spoke on condition of anonymity because he was discussing possible violations of the law by the government.
At times, government watchdogs balked at the way government funds were being used. Most recently, the Interior Ministry launched an investigation into the transfer of $2.8 million in 2003 and 2004 from settlement municipalities to a settlement lobby group, which is funding the fight against the Gaza pullout.
Because the state and separate ministerial budgets don't break down outlays by region, it is difficult to identify the flow of money to settlements. Supporters and detractors both say this allowed Israeli governments to hide behind the budget when it came to settlement financing — and forestall friction with Washington.
"The state of Israel didn't want a head-on confrontation with the United States ... therefore Israel always did things with winks and nods," said Mintz, the settler leader.
Despite its declared opposition to settlements, Washington only began taking action in the early 1990s, when Israel sought billions of dollars in U.S. loan guarantees. Washington said it would deduct sums that went into settlements dollar for dollar.
In 2003, when Israel was granted $9 billion in loan guarantees over three years, the cut was $289.5 million. Officials familiar with the issue, and speaking on condition of anonymity, say that low figure was reached with the help of the influential pro-Israel lobby, the American Israel Public Affairs Committee (AIPAC).
AIPAC officials refused to discuss the issue on the record, but denied they helped to negotiate the numbers.
Israel also used private U.S. donations for which it secured U.S. tax-exempt status, said David Newman, a political scientist at Israel's Ben Gurion University who researched settlement funding.
U.S. tax laws don't exempt donations for political activities such as settlements. Israel separated the World Zionist Organization from the quasi-governmental Jewish Agency, a move that allowed donors to inject money into settlements without losing tax exemptions. In reality, the two groups operate under one umbrella, with the same officials, departments and administrators overseeing the activities, Newman said.
Perhaps the grayest area is how Israel expropriated, confiscated or purchased land for settlements.
During the first 12 years of occupation, more than 10,000 acres of land confiscated by the military for security needs were handed to settlers, according to Defense Ministry statistics quoted in "Lords of the Land," a book by Israeli authors Akiva Eldar and Idit Zartel.
Even after Israel's Supreme Court in 1979 raised the bar for security-related land confiscations, the state seized thousands more acres of West Bank land on security grounds and turned it over for settlers, some living in unauthorized enclaves.
The state-funded Jewish National Fund, along with settler groups and their supporters, also bought land from private Palestinians, using middlemen to cloak the sellers' identity and shield them from attack by other Arabs.
Shaul Goldstein, head of the Gush Etzion Regional Council in the West Bank, said his council recently paid $10,000 for 11,000 square feet of Palestinian land — about one-twentieth the cost of land just over the border.
During the past four decades, the settler leadership and Israeli governments have manipulated budgets, circumstances and public opinion to make the settlement enterprise into what it is today, Newman said.
"They don't need to play around with the illegal use of money because their network is so strong," he said.
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