The land seized forms a corridor from East Jerusalem to Jericho and is intended to be used as a road for Palestinians only. Analysts said the road would run on one side of the Israeli security barrier, while the existing Jerusalem-Jericho road would be reserved for Israelis.

A spokeswoman for the Israeli army said it was necessary to build a road to link Bethlehem and the Judea region with Jericho and the Jordan valley area to "improve the quality of life" for Palestinians. She said the road would be nearly 16 kilometres long and would be built on 145 hectares of state land and 23 hectares of private land that had been confiscated. She added that the army had designed the route to minimise losses to landowners. Adam Keller, of the Israeli peace group Gush Shalom, said the confiscation of land belonging to the villages of Abu Dis, Arab al-Sawahra, Nebi Musa and Talhin Alhamar would rob many villagers of their sole livelihood but would also facilitate the big annexation plan known as E-1, which is aimed at linking the settlement of Ma'aleh Adummim with Jerusalem and cutting the West Bank in two.

He said the confiscations were aimed at building a Palestinian bypass road that would push Palestinian traffic between Bethlehem and Ramallah deep into the desert and effectively bar them from the central part of the West Bank. The E-1 area has been marked out on Israeli Government maps for years but the state has refrained from large-scale development of the area.

The only building to be completed is the proposed headquarters of the Israeli police in the West Bank. The plan for the area envisages 3500 housing units and dozens of businesses that have yet to be started, although infrastructure such as roads and drainage is being built. Jeff Halper, an Israeli geographer who specialises in Israel's development of the West Bank, said it appeared there was a rush to carry out as much work as possible before the US-sponsored meeting between Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert next month. ■Israeli police were due to question Prime Minister Olmert again today after interviewing him on Tuesday over claims he tried to influence the sale of a state-owned bank in favour of Australian billionaire Frank Lowy.

Mr Lowy has denied any wrongdoing in the affair, pointing out that he withdrew any interest in the sale before it was put to tender. GUARDIAN, With ED O'LOUGHLIN