Nabil Abu Rudainah, spokesman for Palestinian President Mahmoud Abbas, told the official Wafa news agency that the “Israeli budget is a proof of Israel’s continued insistence to end the peace process and hit the efforts to rescue the peace talks.”

Abu Rudainah added that “the Palestinian position to stop building in settlements, and mainly in Jerusalem, is unchanged.” He added that the “Palestinians want an Israeli recognition of a Palestinian state on 1967 borders before the resumption of the peace process.”

On Friday, the Israeli daily Haaretz reported that the Israeli Knesset on Wednesday approved the 2011-2012 budget of which two billion shekels were allocated to settlements, their services and security, and hundreds of millions of shekels more hidden among the different clauses of the bill.

According to the budget, 200 housing units will be marketed in Ma’aleh Adumim settlement, to the east of Jerusalem, next year, with 58 million shekel ($16.3 million) allocated to the settlement’s development in 2011 and 31 million shekel ($8.7 million) in 2012. In 2011, 500 housing units will be marketed in the Har Homa settlement, also to the east of Jerusalem; 238 million shekel ($67.2 million) will be spent on its development over the next two years.

The budget also allocated 180 million shekels ($50.8 million) to Route 20, a road set to link Jerusalem’s Pisgat Ze’ev settlement to Route 45, toward Modi’in settlement and Tel Aviv. The anti-settlement Israeli watchdog Peace Now said on Thursday that Route 20 was a clear obstacle to peace as it cuts across neighborhoods meant to become a part of the Palestinian state.

The budget also indicates the settlement division of the World Zionist Organization (WZO) supports at least 16 illegal settlement outposts: The Central Bureau of Statistics lists the number of official settlements in the West Bank at 120, but the budget saysw the WZO works in 136 communities.

The Israeli government will also transfer more than 22 million shekels ($6,2 million) to exporters operating from settlements, to compensate for the loss of sales to the European Union, which no longer recognizes settlement produce as Israeli produce under the terms of its free trade agreement.

Security expenses for Jewish occupiers living in Palestinian neighborhoods in East Jerusalem went up in the new budget, reaching 3,160 shekels ($892) per occupier.

In September, the US-brokered peace talks between Israel and the Palestinians collapsed after Israel refused to extend a 10- month moratorium over freezing settlement constructions in the West Bank and East Jerusalem.

Abbas and other Palestinian officials had threatened to use other diplomatic options, including dissolving the PA in case Israel keeps insisting not to freeze settlement.

Meanwhile, the Palestinian Minister of National Economy Hassan Abu-Libdeh said that PA is working intensively to achieve independence of the Palestinian economy.