Israeli leader mocks EU 'dismay'

"I don't understand how people say that a Palestinian state cannot exist if Maale Adumim is connected to Jerusalem ... These are the same people who say that you'll have a Palestinian state between Gaza and the West Bank, and they're divided by 60-70km," he said.

"That's fine, that doesn't preclude a Palestinian state in their minds but the fact that Maale Adumim can be connected to Jerusalem by a corridor of 2-3km, [the EU says] that somehow prevents a Palestinian state. That's not true. It's simply false," he noted.

"If you repeat a falsehood endlessly, it assumes the cache of truth," he added.

The names E1 and Maale Adumim are unfamiliar to average Europeans who have not studied the map of the Arab-Israeli conflict.

Maale Adumim is one of the existing Israeli settlements which together form a near-complete ring around East Jerusalem. E1 is the last gap in the ring - a patch of barren hills inhabited by a few Bedouin tribesmen.

If Netanyahu builds on E1 it will seal off East Jerusalem and split the West Bank in half.

It means that the future Palestinian state would lose its holy capital.

The 290,000-or-so Palestinians who live in East Jerusalem would become stateless people who reside in Israel but without Israeli citizenship.

It also means the rest of Palestine would be split into three cantons. One of them would be the Gaza strip on the Mediterranean coast. The other two would be the north West Bank and the south West Bank.

The only ways to get from the main economic centre of Ramallah in the north to Bethlehem in the south would be via a 16-metre-wide Israeli-controlled road running through the Israeli ring, or by driving for several hours on an as-yet-unbuilt road through the Judaean desert to the east of the ring.

The EU ministers in their communique on Monday said they are "deeply dismayed" by the idea, because it "would seriously undermine the prospects of a negotiated resolution of the conflict by jeopardizing the possibility of a contiguous and viable Palestinian state and of Jerusalem as the future capital of two states."

For their part, two Israeli experts said that it is Netanyahu who is talking nonsense.

"If you tell me there can be an agreement between Israel and Palestine without Jerusalem, I'll ask: 'What have you been smoking?'," Danny Seideman, a lawyer who set up the Israeli-based NGO, Terrestrial Jerusalem, told EUobserver.

"If he [Netanyahu] says that he can make peace like this, then he is telling the Israeli public lies," Hagit Ofran, a project director in the Israeli-based NGO Peace Now, said.

The EU ministers also threatened to "act accordingly" if Netanyahu does not back down, highlighting Israeli settlement products as an area for potential punitive action.

For Seideman, the threat of Israel's increasing international isolation pales into insignficance compared to the threat of war with Palestine, however.

The EU statement also criticised Hamas - a Palestinian militant group which holds sway in Gaza - after its leader Khaled Meshal last weekend called for the destruction of Israel at a rally attended by more than 100,000 people.

"The EU finds inflammatory statements by Hamas leaders that deny Israel's right to exist unacceptable," it said.

But EU diplomats know that Netanyahu's E1 plan is likely to make Hamas the dominant force in the West Bank as well as in Gaza. The plan makes Hamas' rival, the Fatah party - which has staked its reputation on diplomacy and a two-state solution - look stupid.

In the last exchange of fire in November, Hamas rockets hit the outskirts of Tel Aviv and Jerusalem.

In the last war with Hamas' ally Hezbollah in neighbouring Lebanon in 2006, over 160 Israeli citizens lost their lives.

In the last intifada, or mass Palestinian uprising, which ended in 2005, over 1,000 Israeli citizens were killed.

Meanwhile, the Hamas-linked Muslim Brotherhood has taken power in Israel's southern neighbour, Egypt. Its eastern neighbour, Jordan, has become dangerously unstable. Its other neighbour, Syria, has been penetrated by jihadist warlords and its main regional enemy, Iran, is believed by some Western intelligence experts to already have a nuclear bomb.

"This is not a drill. This is not a psychodrama. This is a geopolitical drama of the highest order. Netanyahu is not posturing. He is thrusting forward to what he believes is the best settlement for Israel's final borders," Seideman told this website.

"The Israeli public is sipping cappucinos on the edge of a volcano," he added.