Report on Israeli Settlement in the Occupied Territories

The territorial division of historical Palestine has entered its most decisive stage since Israel's occupation of the West Bank and Gaza Strip in June 1967. Israeli prime minister Ariel Sharon is the prime instigator of this process, against which the vaunted road map, a creature of multilateral diplomacy now championed by the Bush administration, struggles to remain relevant.

The Bush administration's active engagement in diplomacy to press Israel and the Palestinians to carry out phase one of the road map is a welcome change. Agreements to date, although tentative and modest, show that Washington can bring results. Israelis and Palestinians are fed up with the status quo. Their leaders know this, and neither can defy strong, even-handed U.S. leadership that offers real hope for peace.

Israel's national market for housing is in an unprecedented recession. Housing sales throughout Israel in 2002 reached only 100,000 units, a reduction of almost 20 percent from the height of the market in the mid-1990s. This decline is also apparent in most settlements, where security concerns related to the continuing intifada are an additional factor depressing demand.