Parliament's Finance Committee said Tuesday it approved spending $20.5 million to improve Jewish settlements in the occupied territories at the request of Prime Minister Yitzhak Shamir. The decision came Monday after a plea from Shamir, who asked the committee in a letter to allocate the funds to the Housing Ministry. A copy of Shamir's letter was obtained by The Associated Press. Shamir asked that the money be used to develop settlements and roads beyond the Green Line, which divides Israel from the territories it captured in the 1967 Middle East War. A Shamir spokesman insisted the money would be used only to improve existing settlements, not build new ones. Two new settlements established by Shamir's caretaker government have sparked protests from the United States, which says settlements in the occupied areas are an obstacle to peacemaking. Shulamit Aloni, a Finance Committee member and left-wing legislator, condemned the decision to allocate the money. ``This decision was passed by a completely insane system at a time of political unrest,'' Aloni said. He said it could hurt U.S. aid to Israel and endanger Soviet Jewish emigration. Thousands of Soviet Jews are expected to immigrate to Israel this year, and there is concern in the Soviet Union and among Arab countries that some could settle in the occupied lands. Israel denies it has a policy of steering immigrants to the occupied territories. A report by an Israeli diplomat in Washington released Tuesday in the daily Haaretz supported Aloni's claims. Yoram Ettinger, aide to deputy Foreign Minister Benjamin Natanyahu, said the U.S. Congress appeared to be less motivated to maintain strategic cooperation with Israel and more inclined to support Palestinians in their struggle for statehood, Haaretz reported. The Arab states see any settlement move as an attempt to push out Palestinians from the occupied territories. Government officials insisted that the money approved by the Finance Committee would not be used to form a new Jewish presence in the occupied West Bank or Gaza Strip. ``We are talking about already existing settlements, not forming new ones,'' Shamir's spokesman Avi Pazner said. The allocated money included $2.5 million to ``strengthen'' new settlements and $3 million for developing and expanding existing settlements. A separate sum of $2.5 million was allocated to purchase prefabricated houses and strengthen settlements in the West Bank. Ariel Weinstein, who represents Shamir's Likud bloc on the Finance Committee, said the government decided on a policy of settling the occupied territories and they should be treated as any other Israeli town. ``They need new roads, schools. Nobody thinks the government can decide not to fulfill these needs,'' Weinstein said. In Egypt, President Hosni Mubarak warned Tuesday that settlement of Soviet Jewish immigrants in Israeli-occupied lands threatens ``new bloody confrontation'' in the Middle East. He spoke at the opening session of Socialist International, a non-governmental grouping of 89 socialist parties from 47 countries.
