On Nov. 18, in the beautifully appointed ballroom of Manhattan's posh Grand Hyatt Hotel at Grand Central Station, the Hebron Fund held its annual fund-raising gala. According to organizers, guests paid upward of $300 a head, with anything above the cost of the dinner considered tax-deductible. The evening began with a reception in an anteroom featuring a buffet of gourmet foods. A chef in a tall hat worked a stir-fry station; another expertly sliced sashimi and rolled sushi. A dessert table overflowed with cakes and chocolate mousse. A flute and piano duo played easy-listening versions of vaguely recognizable classics.

The Hebron Fund is a Brooklyn-based charity that supports the "continued Jewish presence" in the West Bank city of Hebron, which is considered holy by Jews, Christians, and Muslims. One of the oldest continuously inhabited cities in the world, Hebron was home to a vibrant Jewish community until 1929, when a series of conflicts between Jews and Arabs culminated in riots. During those riots 67 Palestinian Jews were murdered by Arabs. (The Zionist Archives preserve a list of 435 Jews who were given refuge by their Palestinian Arab neighbors.) Soon after, the British authorities ordered Jews out of Hebron in order to avoid more violence. After the 1948 war, and until 1967, the West Bank was occupied by the Jordanian Army.

Israeli forces took over the city after conquering the West Bank in the 1967 Six Day War. In 1968, a group of religious students obtained permission from the Israeli occupation authorities to observe a Passover seder in one of Hebron's old hotels. Soon after, they founded the settlement of Kiryat Arba on the outskirts of Hebron. The first settlers moved into Hebron itself in 1979, and since then, Hebron has become a magnet for extremists. Today there are between 500 and 600 settlers living in the center of the city, guarded by 4,000 Israeli troops. They live among nearly 200,000 Palestinians.

The opulence of the recent Grand Hyatt event in New York stands in stark contrast to the brutal reality of life for the Palestinians who must live amid the settlements supported by the Hebron Fund's charity. Like most of the West Bank and the entirety of Gaza, the Israeli occupation has transformed Palestinian Hebron into an open-air prison in which any sort of normal life is impossible. Hebron's Palestinian citizens regularly endure round-the-clock curfews. They are effectively under house arrest, sometimes for weeks at a time. Violence at the hands of settlers is also a fact of Palestinian life in Hebron. The Israeli human-rights organization B'Tselem states that attacks by settlers "include beatings, blocking of passage, destruction of property, throwing of stones and eggs, hurling of refuse ... urinating from the settlement structure onto the street," and that "the soldiers and police who witness attacks fail to take sufficient action to stop the attacks and enforce the law. At times they do nothing."

In their book Lords of the Land, Israeli journalists Idith Zertal and Akiva Eldar recount the history of the settlements and the impossible situation that Israel has created for itself by allowing these communities to take root. Despite attempts by hard-line elements to describe the territory conquered in 1967 as "disputed," the territory is broadly understood as occupied land that falls under the purview of the Fourth Geneva Convention, which relates to the protection of civilians under occupation by a foreign power. As article 49 of the Convention states, "the Occupying Power shall not deport or transfer parts of its own civilian population into the territory it occupies," the settlements are considered as illegal under international law. Observers of the Israel-Palestine conflict recognize the settlements as one of the biggest obstacles to peace. Most Americans are unaware of how the settlements function as tools to consolidate Israeli control over land around Jerusalem and over water sources throughout the West Bank, how provocative these settlements really are to Palestinians, and how constant settler violence and continued settlement growth -- irrespective of promises made by the Israeli government -- strengthen the appeal of Palestinian extremists.

Mustafa Barghouti, a Palestinian democracy activist and former candidate for president of the Palestinian Authority, says we should have no illusions about what the Hebron Fund is supporting. "This is helping people in an act of theft, stealing people's land. [Israeli settlers] harass the people in the Old City constantly. They block freedom of passage from one area of the city to another. [Children] who go to schools are prevented from reaching schools. ... The attacks are so severe and so frequent that [Palestinians] have to build special nets to put on top of houses and streets so that thrown bottles and stones will not fall on [their] heads."

The Hebron Fund tells its donors about none of this. In the Fund's promotional materials and photo exhibits at its fundraising gala, as well as on the group's Web site, there is no indication of the deeply provocative and controversial nature of the settlements and no discussion of the measures against Palestinians required to maintain the settlements. Indeed, their materials offer scant evidence that the Palestinians exist at all. When I spoke to attendees at the Hebron Fund gala, it was clear that some were less than fully aware of the violence and misery their donations support, and are primarily interested in "supporting Israel" in a general sense. One elderly woman told me she was at the fundraiser because she believed that Jews should be free to live anywhere in the land of Israel.

Such blithe assertions of entitlement ignore the massive human cost incurred by the Hebron settlement. Hundreds of thousands of dollars flow annually into this community from private donors in the United States like the Hebron Fund, causing thousands of Hebron's Palestinians to live a nightmare so a few hundred Israeli religious extremists can live out their biblical historical fantasies.

As is so much the case in Israel and Palestine, history is inescapable. The 1929 massacre looms particularly large in the ideology of the Hebron settlers, a violent brand of divinely mandated revanchism and martyrdom that is virtually indistinguishable from Palestinian Islamist propaganda. (Yitzhak Rabin himself referred to extremist settlers as "a Jewish Hamas.") In February 1994, Hebron was the scene of one of the most notorious and consequential acts of violence in the history of the conflict. A Brooklyn-born dentist named Baruch Goldstein walked into a Hebron mosque one morning and opened fire with his Uzi submachine gun on Palestinian worshippers, killing 29 and wounding 150 before survivors beat him to death. To this day, extremist settlers continue to venerate Goldstein as a Jewish saint. His grave site is kept as a shrine and pilgrimage destination. And in a deeply offensive bit of souveniring, the Hebron Fund Web site sells T-shirts with the slogan "Uzi Does It." Just as settlers justify violence against Palestinians by invoking "1929," many Palestinians justify violence against Israelis by invoking the 1994 shootings. (It was in response to Goldstein's act of indiscriminate mass murder that Hamas first employed suicide bombing against civilians inside Israel.)

So what is the role of an organization like the Hebron Fund in supporting this extremism? Hebron Fund Executive Director Yossi Baumol insists that the organization funds only "tours, pilgrimage, and religious study." Israeli journalist Seth Freedman, who has gone on Hebron Fund-sponsored tours in the city, suggests that it's difficult "to explicitly link the Hebron Fund and its activities to settler violence per se, since there is no formal process for funding terror in the same way that, say, the Palestinian militants raise funds." But as Freedman points out, that's because settler violence doesn't require much money. Instead, the violence is more impromptu and more random. "It could be a group of settler women screaming abuse at Palestinian school kids, settler kids smashing shop windows, or a settler group marauding their way through an olive grove pointing guns, or even shooting at the farmers -- none of which requires formal training or funding."

In Freedman's view, the Hebron Fund clearly bears some responsibility for violence against Palestinians in the settlement. "By virtue of providing financial and emotional support to the settler community in Hebron," Freedman says, "the Hebron Fund are tacitly supporting and approving of the activities of the settlers."

As to whether the Hebron Fund's American supporters understand what's going on in Hebron, Freedman suggests that the answer is two-layered. "There are those who ... see the tour as a historical, educational trip, and [then] you get those who back Israel to the hilt and want to come on the tour to express their unwavering solidarity with the settlers -- and who then go on to fund the settler activities when they get home and write out their checks." Freedman suggests that this latter group is fully aware of the situation in Hebron. "They [know] what goes on in the area and are proud to play a part in its continuation, since they feel that by doing so they are doing their bit for the country, even though they aren't living there themselves."

I contacted several Hebron Fund donors, but none were willing to speak on the record about the settlement or about their support for the Hebron Fund. I found out later that, after hearing from me, one donor had immediately notified the group that a journalist was making calls. All of my questions for the Hebron Fund itself were directed to Baumol.

Baumol, who lives in Hebron, is quite clear about the reality there. Asked if he supports a two-state solution, Baumol responded with a question of his own: "Do you support the two-state solution for America? Should you give America back to the Indians?" After informing me that he was "very good" at these sorts of arguments, Baumol launched into a racist tirade against Arabs that blew my hair back. "Democracy is poison to Arabs," Baumol said. "Look at Iraq. Saddam Hussein was the best they could have had." Baumol stated his belief that Israel should annex all of the West Bank and Gaza but that the Arabs (he refused to use the word "Palestinians") must not be made citizens. "Israel must not give Arabs a say in how the country is run," Baumol insisted. "You'll never get the truth out of an Arab. Israel should give the Arabs social rights but not give them a say in how the country is governed."

Such stridently racist attitudes are borne out in numerous videos (many of them available on YouTube) taken by peacemaker teams in Hebron, in which leering, taunting settler youths shove, hit, and throw stones at Palestinian civilians, including elderly people and children on their way to school, all under the watchful eyes of Israeli troops. In one particularly disturbing video, a teenage girl of no more than 13 repeatedly strikes an elderly Palestinian woman, while a soldier stands behind her, intervening only to make sure the woman does not retaliate.

Somehow I don't think that the old lady I met at the Grand Hyatt would approve of this, nor would many of the attendees of the Hebron Fund's banquet. But it is the inescapable reality of what their charity supports. "This is actually fundraising for illegality," Barghouti says. "Americans are paying money for things which are considered to be criminal acts by international law. I don't know if they are really aware of the consequences of what they are doing."