Abir Dandis, the mother of the two girls who were murdered in the Negev town of Al-Fura’a last week, couldn't find a police officer to listen to her warnings, neither in Arad nor in Ma’ale Adumim. Both police stations operate in areas where Israel wants to gather the Bedouin into permanent communities, against their will, in order to clear more land for Jewish communities. The dismissive treatment Dandis received shows how the Bedouin are considered simply to be lawbreakers by their very nature. But as a resident of the West Bank asking for help for her daughters, whose father was Israeli, Dandis faced the legal-bureaucratic maze created by the Oslo Accords.

The Palestinian police is not allowed to arrest Israeli civilians. It must hand suspects over to the Israel Police. The Palestinian police complain that in cases of Israelis suspected of committing crimes against Palestinian residents, the Israel Police tend not to investigate or prosecute them.

In addition, the town of Al-Azaria, where Dandis lives, is in Area B, under Palestinian civilian authority and Israeli security authority. According to the testimony of Palestinian residents, neither the IDF nor the Israel Police has any interest in internal Palestinian crime even though they have both the authority and the obligation to act in Area B.

The Palestinian police are limited in what it can do in Area B. Bringing in reinforcements or carrying weapons in emergency situations requires coordination with, and obtaining permission from, the IDF. If Dandis fears that the man who murdered her daughters is going to attack her as well, she has plenty of reason to fear that she will not receive appropriate, immediate police protection from either the Israelis or the Palestinians.

Dandis told Jack Khoury of Haaretz that the Ma’ale Adumim police referred her to the Palestinian Civil Affairs Coordination and Liaison Committee. Theoretically, this committee (which is subordinate to the Civil Affairs Ministry) is the logical place to go for such matters. Its parallel agency in Israel is the Civilian Liaison Committee (which is part of the Coordination and Liaison Administration - a part of the Civil Administration under the Coordinator of Government Activities in the Territories).

In their meetings, they are supposed to discuss matters such as settlers’ complaints about the high volume of the loudspeakers at mosques or Palestinians’ complaints about attacks by settlers. But the Palestinians see the Liaison Committee as a place to submit requests for permission to travel to Israel, and get the impression that its clerks do not have much power when faced with their Israeli counterparts. In any case, the coordination process is cumbersome and long.

The Palestinian police has a family welfare unit, and activists in Palestinian women’s organizations say that in recent years, its performance has improved. But, as stated, it has no authority over Israeli civilians and residents. Several non-governmental women’s groups also operate in the West Bank and in East Jerusalem, and women in similar situations approach them for help. The manager of one such organization told Haaretz that Dandis also fell victim to this confusing duplication of procedures and laws. Had Dandis approached her, she said, she would have referred her to Adalah, the Legal Center for Arab Minority Rights in Israel, which has expertise in navigating Israel’s laws and authorities.

John Kerry revealed his long-awaited plan for peace in the Middle East on Sunday, hinging on a $4bn (£2.6bn) investment in the Palestinian private sector.

The US secretary of state, speaking at the World Economic Forum on the Jordanian shores of the Dead Sea, told an audience including Israeli president Shimon Peres and Palestinian leader Mahmoud Abbas that an independent Palestinian economy is essential to achieving a sustainable peace.

Speaking under the conference banner "Breaking the Impasse", Kerry announced a plan that he promised would be "bigger, bolder and more ambitious" than anything since the Oslo accords, more than 20 years ago.

Tony Blair is to lead a group of private sector leaders in devising a plan to release the Palestinian economy from its dependence on international donors. The initial findings of Blair's taskforce, Kerry boasted, were "stunning", predicting a 50% increase in Palestinian GDP over three years, a cut of two-thirds in unemployment rates and almost double the Palestinian median wage. Currently, 40% of the Palestinian economy is supplied by donor aid.

Kerry assured Abbas that the economic plan was not a substitute for a political solution, which remains the US's "top priority".

Peres, who had taken the stage just minutes before, also issued a personal plea to his Palestinian counterpart to return to the negotiations.

"Let me say to my dear friend President Abbas," Peres said, "Should we really dance around the table? Lets sit together. You'll be surprised how much can be achieved in open, direct and organised meetings."

Thick locks hug the front gates of shuttered shops, now covered in graffiti and dust from lack of use. Only a handful of customers pass along the dimly lit road, sometimes stopping to check the ripeness of fruits and vegetables, or ordering meat in near-empty butcher shops.

“All the shops are closed. I’m the only one open. This used to be the best place,” said 64-year-old Mustafa Sunocret, selling vegetables out of a small storefront in the marketplace near his family’s home in the Muslim quarter of Jerusalem’s Old City.

Amidst the brightly coloured scarves, clothes and carpets, ceramic pottery and religious souvenirs filling the shops of Jerusalem’s historic Old City, Palestinian merchants are struggling to keep their businesses alive.

Faced with worsening health problems, Sunocret told IPS that he cannot work outside of the Old City, even as the cost of maintaining his shop, with high electricity, water and municipal tax bills to pay, weighs on him.

“I only have this shop,” he said. “There is no other work. I’m tired.”

Abed Ajloni, the owner of an antiques shop in the Old City, owes the Jerusalem municipality 250,000 Israeli shekels (68,300 U.S. dollars) in taxes. He told IPS that almost every day, the city’s tax collectors come into the Old City, accompanied by Israeli police and soldiers, to pressure people there to pay.

“It feels like they’re coming again to occupy the city, with the soldiers and police,” Ajloni, who has owned the same shop for 35 years, told IPS. “But where can I go? What can I do? All my life I was in this place.”

He added, “Does Jerusalem belong to us, or to someone else? Who’s responsible for Jerusalem? Who?”

Illegal annexation

Israel occupied East Jerusalem, including the Old City, in 1967. In July 1980, it passed a law stating that “Jerusalem, complete and united, is the capital of Israel”. But Israel’s annexation of East Jerusalem and subsequent application of Israeli laws over the entire city remain unrecognised by the international community.

Under international law, East Jerusalem is considered occupied territory – along with the West Bank, Gaza Strip and Syrian Golan Heights – and Palestinian residents of the city are protected under the Fourth Geneva Convention.

Jerusalem has historically been the economic, political and cultural centre of life for the entire Palestinian population. But after decades languishing under destructive Israeli policies meant to isolate the city from the rest of the Occupied Territories and a lack of municipal services and investment, East Jerusalem has slipped into a state of poverty and neglect.

“After some 45 years of occupation, Arab Jerusalemites suffer from political and cultural schizophrenia, simultaneously connected with and isolated from their two hinterlands: Ramallah and the West Bank to their east, West Jerusalem and Israel to the west,” the International Crisis Group recently wrote.

Israeli restrictions on planning and building, home demolitions, lack of investment in education and jobs, construction of an eight-foot-high separation barrier between and around Palestinian neighbourhoods and the creation of a permit system to enter Jerusalem have all contributed to the city’s isolation.

Formal Palestinian political groups have also been banned from the city, and between 2001-2009, Israel closed an estimated 26 organisations, including the former Palestinian Liberation Organisation headquarters in Jerusalem, the Orient House and the Jerusalem Chamber of Commerce.

Extreme poverty

Israel’s policies have also led to higher prices for basic goods and services and forced many Palestinian business owners to close shop and move to Ramallah or other Palestinian neighbourhoods on the other side of the wall. Many Palestinian Jerusalemites also prefer to do their shopping in the West Bank, or in West Jerusalem, where prices are lower.

While Palestinians constitute 39 percent of the city’s population today, almost 80 percent of East Jerusalem residents, including 85 percent of children, live below the poverty line.

“How could you develop [an] economy if you don’t control your resources? How could you develop [an] economy if you don’t have any control of your borders?” said Zakaria Odeh, director of the Civic Coalition for Palestinian Rights in Jerusalem, of “this kind of fragmentation, checkpoints, closure”.

“Without freedom of movement of goods and human beings, how could you develop an economy?” he asked.

“You can’t talk about independent economy in Jerusalem or the West Bank or in all of Palestine without a political solution. We don’t have a Palestinian economy; we have economic activities. That’s all we have,” Odeh told IPS.

Israel’s separation barrier alone, according to a new report by the United Nations Conference on Trade and Development (UNCTD), has caused a direct loss of over one billion dollars to Palestinians in Jerusalem, and continues to incur 200 million dollars per year in lost opportunities.

Israel’s severing and control over the Jerusalem-Jericho road – the historical trade route that connected Jerusalem to the rest of the West Bank and Middle East – has also contributed to the city’s economic downturn.

Separation of Jerusalem from West Bank

Before the First Intifada (Arabic for “uprising”) began in the late 1980s, East Jerusalem contributed approximately 14 to 15 percent of the gross domestic product (GDP) in the Occupied Palestinian territories (OPT). By 2000, that number had dropped to less than eight percent; in 2010, the East Jerusalem economy, compared to the rest of the OPT, was estimated at only seven percent.

“Economic separation resulted in the contraction in the relative size of the East Jerusalem economy, its detachment from the remaining OPT and the gradual redirection of East Jerusalem employment towards the Israeli labour market,” the U.N. report found.

Decades ago, Israel adopted a policy to maintain a so-called “demographic balance” in Jerusalem and attempt to limit Palestinian residents of the city to 26.5 percent or less of the total population.

To maintain this composition, Israel built numerous Jewish-Israeli settlements inside and in a ring around Jerusalem and changed the municipal boundaries to encompass Jewish neighbourhoods while excluding Palestinian ones.

It is now estimated that 90,000 Palestinians holding Jerusalem residency rights live on the other side of the separation barrier and must cross through Israeli checkpoints in order to reach Jerusalem for school, medical treatment, work, and other services.

“Israel is using all kinds of tools to push the Palestinians to leave; sometimes they are visible, and sometimes invisible tools,” explained Ziad al-Hammouri, director of the Jerusalem Centre for Social and Economic Rights (JCSER).

Al-Hammouri told IPS that at least 25 percent of the 1,000 Palestinian shops in the Old City were closed in recent years as a result of high municipal taxes and a lack of customers. “Taxation is an invisible tool…as dangerous as revoking ID cards and demolishing houses,” he said. “Israel will use this as pressure and as a tool in the future to confiscate these shops and properties.”

Israel will not set up a special panel to investigate last winter's Gaza offensive, a Cabinet minister said Tuesday, rejecting a key demand of a U.N. report that accused the military of war crimes.

Information Minister Yuli Edelstein said Israel would submit a document to the U.N. later this week that deals only with Israel's own investigations of its conduct during the three-week war. Those investigations have been conducted by the military, which has exonerated itself of any systematic wrongdoing.

"To the best of my knowledge, there is no intention to create an investigative committee," Edelstein told Israel Radio, saying he had checked with his colleagues in the Cabinet.

It was not certain that Edelstein's comments were Israel's last word on the subject. Prime Minister Benjamin Netanyahu was out of the country, and his office declined comment.

The U.N. report accused both Israel and Gaza's Islamic militant Hamas rulers of war crimes and urged both to independently probe their wartime conduct. The U.N. General Assembly endorsed the report last November, giving the sides until Feb. 5 to respond.

By rejecting calls for an independent inquiry, Israel could open itself to international war crimes proceedings. But Israeli leaders are worried that forcing soldiers to testify could hurt morale and make troops wary of taking part in future battles.

Israel, which considers the report to be deeply flawed, "will relay a document addressing something very specific, namely, the character and credibility of internal investigations that took place in Israel," Edelstein said.

Nine Israel-based human rights groups issued a call Tuesday to Netanyahu to order a full-fledged inquiry. In a joint statement, they said the internal probe "does not satisfy Israel's obligations to investigate."

Although Israel denies wrongdoing, it is worried about the report, which has battered its image internationally. Netanyahu recently called the report one of Israel's three biggest strategic challenges — along with Iran's nuclear threat and militants' rocket attacks that had sparked the Gaza war.

Israel launched the Gaza offensive after years of rocket barrages on its southern region. More than 1,400 Palestinians, including more than 900 civilians, were killed, as were 13 Israelis. Large chunks of Gaza were devastated and have not been repaired because of an ongoing Israeli and Egyptian blockade.

The U.N. report, authored by veteran war crimes prosecutor Richard Goldstone, accused Israel of deliberately targeting Palestinian civilians and intentionally destroying infrastructure, homes and livelihoods.

Powerful forces in Israel have arrayed against appointing an independent panel with sweeping investigative powers. Netanyahu, who will ultimately decide the case, has said he doesn't want to see Israeli officers hauled before such a panel.

But in deference to the international outrage, top defense officials would be open to having prominent civilian jurists examine the military's own investigations, without empowering them to call soldiers to testify, defense officials said. They spoke on condition of anonymity because they were not authorized to report on confidential discussions.

It's unlikely such a halfway measure would satisfy the U.N.'s call for a credible probe.

If Israel disregards the U.N.'s call, the Security Council could refer the case to prosecutors at the International Criminal Court in The Hague. Washington would be expected to block such a move, but would not be able to spare Israel an embarrassing, high-profile investigation.

Israel says Hamas is to blame for civilian casualties because militants operated within residential areas. It says it made exceptional efforts to avoid harming civilians.

Israel refused to cooperate with the Goldstone probe, despite Goldstone's Jewish faith and his close ties Israel, because the U.N. body that commissioned it has a history of singling out Israel for particular censure.

Israel announced yesterday that it will build nearly 700 apartments in East Jerusalem, drawing criticism from both Palestinians and Washington, which denounced the plan as an obstacle to peacemaking.

The dispute over East Jerusalem is the most intractable – and explosive – in the Israeli-Palestinian conflict. Palestinians claim East Jerusalem as the capital of a future state and consider Jewish neighbourhoods there to be settlements. Israel claims all of the city as its eternal capital.

The Israeli Prime Minister Benjamin Netanyahu announced a slowdown in West Bank settlement construction several weeks ago in hopes of bringing the Palestinians back to the negotiating table. But the order did not include construction in East Jerusalem, home to sensitive Jewish, Muslim and Christian holy sites. "We make a distinction between the West Bank and Jerusalem. Jerusalem is our capital and remains such," said government spokesman Mark Regev.

The Housing Ministry said it had approved a total of 692 new apartments in three existing Jewish neighbourhoods – Pisgat Zeev, Neve Yaakov and Har Homa – already inhabited by tens of thousands of people. Israel does not consider its East Jerusalem neighbourhoods to be settlements. It captured the city's eastern sector in the 1967 Six Day War and immediately annexed the area. The international community does not recognise the annexation.

"We condemn this Israeli policy of continuing settlement activities, and we hope this will be an eye-opener for the US administration," said Palestinian official Saeb Erekat.

The Palestinians have refused to reopen peace talks, which broke down a year ago, until Mr Netanyahu halts all settlement construction in the West Bank and East Jerusalem. For months, the United States has been trying to bring the sides together. An Israeli official said the government had informed the Obama administration about the latest planned construction. However, a US official said the construction was another blow to peace efforts. "We feel that unilateral actions make it harder for people to get back together at the table, and that's what our goals are," said the official, speaking on condition of anonymity pending a formal reaction from Washington.

Mr Netanyahu announced the settlement slowdown last month in an effort to rekindle peace talks with the Palestinians. But the Palestinians have rebuffed that overture because the order does not affect East Jerusalem or block construction that is already under way on 3,000 settlement apartments.

Settlement construction became the key sticking point in resuming negotiations after US President Barack Obama demanded a total cessation shortly after taking office. He has since softened his stance, but the Palestinians have not.

News of the East Jerusalem construction plans was disclosed as a former Israeli MP reported that Mr Netanyahu was hammering out an agreement with the Americans on a framework for relaunching peace talks.

Britain has revoked several licenses granted to British companies to sell weapons parts to Israel because of concerns over their use in Israel's recent war in the Gaza Strip, British and Israeli officials said Monday.

The decision, which an Israeli official said applied to parts for missile boats, does not appear to affect Israel's military capabilities significantly. But it was symbolic given the international outcry against the Israeli military's conduct during the three-week war early this year. While recognizing Israel's right to defend itself, Britain has characterized Israeli actions during the bruising war as "disproportionate."

An Israeli official said Britain canceled five licenses that applied to Saar-class missile boat parts after reviewing 182 licenses in all. He had no further details on what parts were at issue, and spoke on condition of anonymity because he was not authorized to discuss Britain's decision.

Saar boats fired missiles and artillery shells at targets along Gaza's coast and as cover for ground operations during Israel's three-week war against the territory's Hamas rulers, which the military termed Operation Cast Lead. The operation was meant to quell eight years of militant rocket and mortar barrages on southern Israel.

In London, a spokeswoman for Britain's Foreign Office confirmed a "small number" of export licenses were revoked, but added that there was "no partial U.K. arms embargo on Israel."

After reviewing export licenses after the Gaza fighting, "we judged that in a small number of cases Israeli action in Operation Cast Lead would result in the export of those goods now contravening" EU and British arms-export licensing criteria. "These licenses have been revoked," the spokeswoman said.

The Foreign Office did not specify how many licenses were reviewed or revoked, or which companies held the licenses.

Britain has revoked or rejected arms-exporting licenses to Israel in the past, Israeli and British officials said. Britain is not a major Israeli defense supplier.

There was no comment from the Israeli military or from the Defense Ministry, which oversees military purchases.

The war provoked an international uproar because of the high civilian death toll it exacted and the large-scale destruction it wrought. More than 1,400 Palestinians, including more than 900 civilians, were killed, thousands of homes were destroyed and Gaza's infrastructure suffered heavy damage, according to Gaza health officials and human rights groups.

Israel says about 1,100 Palestinians were killed and that the overwhelming majority were militants, though it has not backed up that claim with documented proof. Thirteen Israelis also died.

International human rights groups have said Israel's overwhelming use of force violated international laws of war - an allegation it denies. Rights groups have also accused Hamas of war crimes for allegedly using civilian areas for cover to carry out attacks and firing rockets indiscriminately into civilian areas.

Israelis moving to the West Bank accounted for more than a third of settler population growth in recent years, government statistics show, undercutting Israel's argument that it is continuing settlement construction only to accommodate growing families already living there.

The so-called "natural growth" rationale for building on land the Palestinians claim for a future state has vaulted Prime Minister Benjamin Netanyahu into an unusually vocal and public clash with the Obama administration, which has come out strong against continued settlement expansion.

Settlement construction had been expected to be the focus of a meeting in Paris on Thursday between Netanyahu and America's top Mideast envoy, George Mitchell, a longtime settlement critic. But the meeting was abruptly postponed, and an Israeli official, speaking on condition of anonymity because of the sensitivity of the subject, said Israel sought more time to iron out differences with the U.S. administration, including over settlements.

Opponents say the government invokes "natural growth" as a cover to build thousands of houses across the West Bank, including hundreds that Palestinian laborers are building in Maaleh Adumim, a major settlement outside Jerusalem.

"The Israelis are playing a game of deception by what they call natural growth," said Yasser Abed Rabbo, a senior aide to Palestinian President Mahmoud Abbas.

Data from Israel's Central Bureau of Statistics supports that argument, showing that in 2007, 36 percent of all new settlers had moved from Israel or abroad.

More recent data, including for the period since Netanyahu's government took office in March, is not yet available, but there are few reasons to think Israel has reversed the trend, said Hagit Ofran, a settlement expert for Peace Now, a settlement watchdog group.

Amid the influx of people drawn to cheaper housing in settlements, construction has continued — more than 5,500 new apartments have been completed over the past three years in the West Bank, bureau figures show.

Settlements are a major obstacle to peacemaking because Israel has used them to extend its de facto boundaries into the West Bank and to cement its claim on east Jerusalem. The Palestinians claim both territories, captured by Israel in 1967, for a future state, along with the Gaza Strip, and want the Jewish construction there to stop.

Under the 2003 U.S.-backed road map peace plan, Israel promised to halt all settlement construction, including for natural growth. But the building has gone on.

Israel argues that growing families need bigger apartments and that grown children, raising their own families, should be allowed to live near their parents.

Jerusalem-born Yaffa Shkibai, who has lived in Maaleh Adumim for 26 of her 50 years, has bought apartments for each of her four children here.

"They should continue building and not be afraid of the U.S.," she said. "If we bend, they'll kick us out of here."

The United States is among those monitoring settlement activity. The U.S. Consulate in Jerusalem said its officials regularly visit settlements and take photographs. A foreman at one construction project in Maaleh Adumim said Monday that U.S. officials had been there recently, walking around and taking pictures.

Last week, Netanyahu grudgingly yielded to President Barack Obama's demand that Israel endorse Palestinian independence, albeit shackled by a series of conditions. But he flatly resisted Obama's pressure for a settlement freeze.

"We have no intention of building new settlements or of expropriating additional land for existing settlements," Netanyahu said in a major policy speech last week. "But there is a need to enable the residents to live normal lives, to allow mothers and fathers to raise their children like families elsewhere."

Netanyahu pointedly dropped the politically charged "natural growth" phrase for "normal lives."

But the linguistic slight of hand doesn't mask the fact that migration — and not just the growth of families — is a major factor in settler population growth.

Migration from Israel and abroad accounted for 5,300 of the 14,500 new settlers in 2007, the last year for which bureau data are available.

And 2007 wasn't a random blip. Migration accounted for between a third and half of the population growth in each year between 1999 and 2007, save 2005, when numbers were skewed by Israel's withdrawal of 8,500 settlers from the Gaza Strip.

Nearly 300,000 Israelis currently live in the West Bank and 180,000 in east Jerusalem, whose annexation by Israel in 1967 is not internationally recognized. That's more than double from 116,300 at the end of 1993, the year Israel and the Palestinians signed their landmark accord.

Between 2006 and 2008 — roughly the tenure of the previous government — Israel completed building 5,503 apartments in the West Bank and began building 5,125, the statistics bureau said.

Maaleh Adumim, home to more than 35,000 settlers, continues to be one of the biggest magnets for migrants.

At the settlement's northeastern edge, overlooking the Judean desert, rumbling front-end loaders were busy scooping up mounds of dirt and stones at a new neighborhood that has been going up for the past 2 1/2 years. Bricks, steel rods and coils of rubber tubing were piled up outside the unfinished homes, which Palestinian laborers were building.

Yossi Navon, the foreman who spoke of the Embassy personnel, said apartments were going for about half of what a comparable apartment in Jerusalem would fetch.

"I think Bibi said it right," Navon said, referring to Netanyahu by his nickname. "Natural growth has to continue."