maaleh adumim | Bulldozers cleared rubble and cranes hoisted equipment in the largest West Bank settlement a day after criticism from President Bush clouded a Texas summit with Israel’s prime minister.

Israel says the construction is taking place within existing boundaries and does not constitute expansion.

But Israel’s distinction is lost on the Palestinians and possibly the Americans, too. The Bush administration has insisted that Israel stick to a Mideast peace plan that bans all settlement construction.

Israel recently confirmed plans to build an additional 3,650 houses between the settlement, Maaleh Adumim, and Jerusalem, five miles to the west — effectively cutting off the Arab section of the city from the rest of the West Bank. Palestinians say this would make it impossible for them to create a state in the West Bank and Gaza with East Jerusalem as its capital.

This week, finishing touches were being put on apartment buildings at the edge of Maaleh Adumim, home to 30,000 Israelis in the barren Judean desert.

Speaking to reporters before meeting with President Bush, Israeli Prime Minister Ariel Sharon said Israel has built settlements to solidify control over areas of the West Bank it deems vital to its security. “It was not to antagonize the U.S., but to keep areas that seem strategic to Israel,” Sharon said.

But at his ranch Bush told Sharon that any further building in settlements would violate the “road map” peace plan. Making the dispute public at a news conference after their talk, Bush said: “I’ve been very clear. Israel has an obligation under the road map. That’s no expansion of settlements.”

Benny Kashriel, mayor of the settlement, said it is widely considered part of Israel and noted that Bush has indicated in the past that the United States considers it part of Israel as well. In 2004, Bush broke with U.S. policy and announced that any final Israeli-Palestinian peace deal would have to take into account existing Jewish population centers.

Israel interpreted that as U.S. approval for its plans to hold on to major settlement blocs around Jerusalem, even as it moves to evacuate Jewish settlers from the Gaza Strip and four West Bank settlements this summer.

A separation barrier Israel is building to keep Palestinian attackers out encircles Maaleh Adumim on the Israeli side, further dividing East Jerusalem from the West Bank.

Saeb Erekat, the chief Palestinian negotiator, said that there are no legal settlements and urged Israel to halt its construction.

“We hope that Prime Minister Sharon will heed President Bush’s call to have a full cessation of settlement activities,” Erekat said. “This is Israel’s main obligation in the first phase of the road map: to stop all settlement activities.” After meeting Israeli Vice Premier Shimon Peres in Tel Aviv, Erekat said Bush’s remarks would “re-energize the road map.”

The settlement dispute ruined the impression Sharon was hoping for at his summit in Texas with Bush — warm U.S. political support for his Gaza pullout plan, which is facing stiff domestic opposition.

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