Israel has dusted off controversial plans to build the first Jewish settlement in the West Bank in a decade, at a time when hopes for renewed peace and the swift creation of a Palestinian state are already flagging.

The decision to start building 20 homes at a former military base at Maskiot in the Jordan Valley came as government statistics revealed that the settler population in the West Bank — known to Israelis as Judaea and Samaria — had risen by 15,000 people last year, despite an official freeze in construction. The figures marked a 5.5 per cent growth in the settler population in occupied Palestinian land, which is a serious blow to the promises to halt settlement growth made by Israel at the Annapolis peace conference in Maryland in November.

While Palestinian leaders condemned the planned settlement, Israeli soldiers and policemen clashed with settlers in the West Bank when they tried to investigate allegations of illegal construction. One settler grabbed a rifle from a soldier and fired it in the air before being overpowered.

In a separate incident, more than 100 settlers attacked Palestinian property near Nablus, damaging their crops, Palestinian sources said.

The decision to build homes at Maskiot is expected to be given final approval by Ehud Barak, the Defence Minister. The homes will be occupied by families who were evicted from the Jewish settlements in the Gaza Strip in 2005 by the former Prime Minister Ariel Sharon, one of the originators of the settlement movement. Israel said that it would not relocate those settlers — about 7,000 people — in the West Bank.

“We condemn this Israeli decision in the strongest possible terms,” Saeb Erekat, a senior Palestinian negotiator, said. “This is undermining us, and killing and destroying the peace process.”

Despite pledges to stop expansion Israel has continued to allow what it terms “natural growth” within existing Jewish communities built on land captured in the 1967 Six-Day War.

Zalman Shoval, a former aide to Mr Sharon, wrote in a column this week: “Everybody seems to have given up on the idea that by January 2009 there could be a democratic, viable, Palestinian state living in peace alongside Israel; so the aim has been downgraded to a ‘shelf’ agreement, which could still happen, although in the wake of Israel’s political mess, even that isn’t certain now.”

According to figures released by the Israeli Interior Ministry, the population growth of 5.5 per cent in the Jewish settlements is far higher than the national average of 1.8 per cent for last year. One settlement grew by 14 per cent.

Many Jewish settlers consider the West Bank to be part of biblical Israel and stand by their historical right to the land. Some have moved there for cheaper housing and tax breaks. Palestinians want to build their future state in the West Bank and Gaza.

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