Gaza Strip Settlers May Go to West Bank

Jewish settlers from the Gaza Strip and the northern West Bank will be able to use the compensation they receive from Israel to build homes in other West Bank settlements, the director of the agency responsible for evacuating settlers said yesterday.

Yonathan Bassi said the settlers would be able to spend their compensation wherever they wanted.

"They are free people - they can go where they want. They can go to Canada, Jerusalem or any of the settlements in the West Bank," he said.

Settlers who went to the West Bank would receive as much money as those who chose Jerusalem or Tel Aviv. Those who moved to the Negev or the Galilee, where there are big Arab populations, would receive a $30,000 (£16,000) bonus.

The news angered Palestinians, with the possibility of up to 9,000 settlers moving directly from Gaza to the West Bank.

Saeb Erekat, the chief Palestinian negotiator, said the transfer of settlers from Gaza and the northern West Bank to other settlements would "create more obstacles to peace". He said: "One of the main things that we have stressed about making the disengagement plan work is that they must be transferred to Israel. Moving them to the West Bank will kill the whole project and destroy the idea of evolving the peace process."

Ariel Sharon, Israel's prime minister, has said the Gaza disengagement did not replace the road map peace plan sponsored by George Bush and Tony Blair but was a unilateral action to improve security.

The plan called for a freeze on settlement activity, although the US and Israel agreed some building to cater for natural growth.

Palestinians believe the dismantling of the majority of West Bank settlements is vital for a viable Palestinian state. But an influx of up to 9,000 settlers would make evacua tion of these settlements more difficult under a future peace agreement.

The legislative phase of the disengagement plan is due to end in March. Between March and June, the army will prepare for the evacuation, which will take place during the summer. The government has decided that all private homes will be destroyed but is negotiating to sell the businesses. Mr Bassi said between one quarter and one third of settlers' families had contacted his office to inquire about compensation and relocation, although most insisted on complete secrecy.

Mr Bassi, who lives in a kibbutz inside Israel, has become a hate figure for settlers and the right, who have equated his job with that of a Nazi bureaucrat planning the deportation of Jews.

Despite the interest of some settlers in compensation, Mr Bassi said more than 50% had ignored his agency's calls. "Denial is the biggest problem. Some of the settlers seriously believe nothing will happen while the prime minister says that he is 100% certain it will happen. I still do not know if 90% of settlers will still be there next summer ..." he said.

Ranaan Gissin, an adviser to Mr Sharon, said the disengagement would continue regardless of Yasser Arafat's death. "We are involved in one disengagement," he said.

"The Palestinians need to disengage from violence and anarchy. If both prove successful then we can move to a position where we can get back to negotiations outlined by the road map."

The Israeli economy has lost $12bn (£6.4bn) and the Palestinian economy $4.5bn as a result of the past four years of fighting, an Israeli economist said yesterday.

Danny Singerman, chief economist at the research firm Business Data Israel, said the intifada had cut the Palestinian GDP by about 30% and Israel's GDP by some 10%.