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Israel’s housing ministry’s proposed 2008 budget confirms plans to build in disputed areas.

The proposed budget requests funding to construct 500 apartments in the East Jerusalem neighborhood of Har Homa and 240 apartments in the settlement of Ma’aleh Adumim. The requests total $25 million.

The proposal comes two days after U.S. Secretary of State Condoleezza Rice told jounalists that Israel has taken steps showing that it understands the seriousness of the settlement issue and its responsibilities under the ‘road map.’

Israel intends to hold on to Ma’aleh Adumim, population 30,000, in a final peace agreement with the Palestinians. It is one of three settlement blocs Israel plans to retain in a peace accord, possibly trading Israeli territory within the 1967 borders in exchange.

Har Homa is located within the municipal borders of Jerusalem, annexed in 1967.

Rafi Eitan, the minister for Jerusalem affairs, told Army Radio that Israel never promised to halt construction within the municipal borders of Jerusalem.

“Har Homa is an integral, organic part of Jerusalem,” Eitan said.

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