Report: PM promised to build 600 homes in W. Bank settlements

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"Prime Minister Ehud Olmert has promised to build about 600 housing units in contentious West Bank settlements, a political ally of the prime minister said Wednesday, adding new tensions to peace talks between Israel and the Palestinians.

The announcement came shortly before U.S. President George W. Bush arrived in Israel to take part in the Jewish state's 60th anniversary celebrations - and to try to nudge forward Israeli-Palestinian peace negotiations.

Palestinians want all of the West Bank as part of their future state. They oppose all Israeli settlement activity in the West Bank, saying it undermines peace talks. Some 270,000 Israelis live in West Bank settlements.

New settlement building could help the embattled Olmert keep his coalition together while police investigate corruption suspicions against him. But it would make it tougher for Palestinian President Mahmoud Abbas to convince his people that diplomacy, not violence, could win them a state."

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and it's not going to help the prospects of peace.