Israel has begun work on a controversial new programme of home building in Jewish settlements in the West Bank. About 200 homes will be built on a hillside on the edge of the Har Gilo settlement close to Jerusalem. It is thought Prime Minister Ariel Sharon's plan could eventually see the construction of more than 2,000 houses on existing enclaves. Palestinian Minister Saeb Ereket blasted Washington for backing the move. He said: "This is destroying the peace process, this is destroying the two state solution, if this land-grab continues the question that is asked: where would the Palestinian state be established?" The plan appears to be aimed at placating Israeli right-wing opposition to Sharon's blueprint for withdrawing from Gaza where around 8,000 settlers live in heavily guarded compounds. **PHOTO CAPTION*** Israeli bulldozers churn up a rocky hillside beyond the last line of houses in the Har Gilo settlement, south of Jerusalem, August 23, 2004. (Reuters)