Benjamin Netanyahu unveils plans for 5,000 new homes in East Jerusalem

Israeli Prime Minister Benjamin Netanyahu announced Thursday he was pushing ahead with the construction of 5,000 new Jewish homes in key areas of East Jerusalem, where critics say additional building could cut Palestinian residents off from the rest of the West Bank.

On a visit to the Har Homa neighbourhood, Netanyahu pledged to build the homes there and in the Givat Hamatos neighbourhood. Both lie on some of the last spaces of land linking the Palestinian areas of the West Bank to their hoped-for capital in East Jerusalem.

Netanyahu pledged to turn Har Homa into a "mid-sized city," expanding a presence that many believe has already dealt a devastating blow to the Palestinian dream of independence.

Building in the areas has previously sparked international outcry, which has at times reined in Netanyahu's settlement building sprees. But emboldened by U.S. President Donald Trump's support and his favourable Mideast plan, Netanyahu appears to be charging ahead with construction there.

"We are connecting Jerusalem. We are connecting all parts of the united Jerusalem, the rebuilt Jerusalem," he said. "We did it in the face of fierce international opposition. We surmounted all the obstacles and we have done it."

Netanyahu said he was pushing forward with 5,200 homes for Jews in the area, in addition to 1,000 new homes for Palestinians who live in Jerusalem's nearby Beit Safafa neighbourhood.

The Palestinians want East Jerusalem, along with the West Bank and the Gaza Strip land Israelcaptured in the 1967 Mideast war for their future state. They have long opposed construction in this part of East Jerusalem, claiming it would isolate Jerusalem from the West Bank.

Netanyahu is also aiming for re-election on March 2 in the country's third vote in less than a year, though a looming corruption trialdue to start two weeks later clouds his future.During the campaign he has repeatedly pandered to his nationalist base of voters whom he hopes will turn out en masse to deliverhim victory over his centrist rivals in the Blue and White party.

Nabil Abu Rudeineh, a spokesperson for Palestinian President Mahmoud Abbas, denounced the move as another of Netanyahu's "attempts to destroy the two-state solution and any possibility of peace."

"This is a grave violation of the international law which says that settlements in all the Palestinian territories, including East Jerusalem, is illegal," he added.

The Israeli settlement watchdog Peace Now said expanding in both of the controversial neighbourhoods amounted to "state suicide."

"Both sever parts of East Jerusalem and the connection to Bethlehem, preventing a viable two-state solution," it said in a statement.

Trade dispute settled for now

Israel has annexed East Jerusalem in a move not recognized by most of the international community, and it considers the entire city as its eternal, undivided capital. Upending decades of U.S. foreign policy, the Trump administration recognized Jerusalem as Israel's capital in 2017, moving its embassy there the following year.

Under Trump's Mideast vision, Israel would retain full control of the city and its venerated holy sites. The Palestinians would get a capital in the city's outskirts, which is now made up of poor, crowded neighbourhoods located behind a hulking concrete separation barrier.

The Palestinians have rejected the plan outright.

Even with tensions high after the unveiling of Trump's plan, Israel and the Palestinians managed to resolve one of their nagging disputes Thursday by reaching an agreement to end an escalating trade crisis.

Israeli Defence Minister Naftali Bennett said Israel would begin allowing Palestinian agricultural exports after the Palestinians resumed accepting Israeli beef.

The Palestinian agriculture ministry said Israel had allowed the Palestinians to import beef directly from abroad without acknowledging whether the Palestinians had agreed to accept Israeli beef as well.

The trade crisis erupted in September, when the Palestinians decided to stop importing beef from Israel. The Palestinian Authority claimed most of the 120,000 head of cattle they imported monthly from Israel was itself imported and they therefore preferred to import directly from abroad. The move appeared aimed at reducing the Palestinians' economic dependence on Israel.

Shortly after the September announcement, Israeli cattle ranchers saw a drop in their market and pressured Israeli authorities to take action. Bennett retaliated with a ban on Palestinian beef and other products, triggering the Palestinians to expand their boycott, and stop importing Israeli vegetables, fruits, beverages and mineral water.

The Palestinians said their actions were aimed at pressuring Israel into revoking its ban, while Israel said normal trade would be restored the moment the Palestinians reversed the cattle ban that sparked the crisis.