Chaim Hanfling knows a lot about this settlement's population boom. Six of his 11 siblings have moved here from Jerusalem in recent years to take advantage of the lower land prices, and at age 29, he has added four children of his own.

Located just over the Green Line that marks the territory occupied in the 1967 Arab-Israeli war, the booming ultra-Orthodox community, home to more than 41,000 people, shows why the settlement freeze demanded by the Obama administration is proving controversial for Israeli Prime Minister Binyamin Netanyahu and also why Palestinian officials are insisting on it.

Amid their gleaming, modern apartment buildings, with Tel Aviv visible on the horizon, residents say they have little in common with the people who have hauled mobile homes to hilltops in hopes of deepening Israel's presence in the occupied West Bank. But they are having lots of babies -- and they expect the bulldozers and cement mixers to keep supplying larger schools and more housing, a typically suburban demand that the country's political leadership is finding hard to refuse.

"We don't feel this is a settlement," said Hanfling. "We're in the middle of the country. It's like Tel Aviv or Ramat Gan," another Israeli city.

Across a nearby valley, residents of the Palestinian village of Bilin have watched in dismay as Modiin Illit has grown toward them and an Israeli barrier has snaked its way across their olive groves and pastureland. Two years ago, Israel's Supreme Court ordered the fence relocated, but nothing has happened. A weekly protest near the fence, joined by sympathetic Israelis and foreigners, has led to a steady stream of injuries, with protesters hit by Israeli fire and Israeli troops struck by rocks. One villager, Bassem Abu Rahmeh, died in April when a tear gas canister hit him in the chest.

The court said, 'Move the fence,' so why is he dead?" villager Basel Mansour said as he surveyed the valley between Bilin and Modiin Illit from his rooftop. "Why hasn't it been moved?"

Amid a dispute with the Obama administration over the future of West Bank settlements, Israeli Defense Minister Ehud Barak left for the United States on Monday for talks with White House special envoy George J. Mitchell. Local news reports say he may propose a temporary construction freeze of perhaps three months, though Netanyahu's office said it is committed to "normal life" proceeding.

Of the nearly 290,000 Israelis who live in West Bank settlements, nearly 40 percent reside in three areas -- Modiin Illit, Betar Illit and Maale Adumim -- where the impact of a settlement freeze would probably be felt most deeply.
Debate over West Bank settlements is separate from discussion of Jerusalem, which both Israelis and Palestinians claim as their national capital. The Obama administration has also asked Israel to freeze construction in Jerusalem neighborhoods occupied after the 1967 war.

"The goal is to find common ground with the Americans," said Netanyahu spokesman Mark Regev. "Israel is willing to be creative and flexible."

Palestinian officials said Monday that they will not restart peace talks with Israel until a full settlement freeze is declared.

A trip across the valley outside Modiin Illit shows why the settlements remain a central Palestinian concern.

When the Israeli barrier was built around Modiin Illit, it looped into Palestinian territory -- too far, according to the Israeli Supreme Court, whose 2007 decision said that the route went farther than security needs required in order to make room for more building in the settlement.
Planned additions to the community have since been canceled by the Defense Ministry, which is in charge of construction in the West Bank. Israel Defense Forces Central Command spokesman Peter Lerner said the military has designed a new route for the fence that will return land to Bilin, but has not received funding.

The lack of an agreed-upon border, Palestinian officials and human rights groups said, figures into a variety of problems -- such as the violence that flares regularly between Palestinians and settlers, as well as larger policy matters. The rights group B'Tselem said in a recent report that neither Israel nor the Palestinian Authority is taking clear responsibility for wastewater treatment in settlements or Palestinian towns and villages -- putting local drinking water at risk.

Facing U.S. demands, Israel has said it will take no more land for settlement and has agreed to remove more than 20 unauthorized outposts. But even that has proved slow going. The government recently proposed dismantling the outpost of Migron, a settlement of about 40 families that is under legal challenge for being built on private Palestinian land, by expanding another settlement nearby.

"The individuals in outposts shouldn't be rewarded" for building illegally, said Michael Sfard, an attorney for the group Peace Now who helped prepare a lawsuit against Migron.

In the City Hall of Modiin Illit, such struggles seem part of a different world. Pointing from a hillside to bulldozers busy in one part of town and graded sites ready for building in another, Mayor Yaakov Guterman said the city has 1,000 apartments under construction but is running out of room.
Modiin Illit can't expand to the west, back over the Green Line, he said, because that is a designated Israeli forest area. He said the community should be allowed to spread to the surrounding valley because, in his view, Modiin Illit "will be on the Israeli side" of the border under any final peace deal.
Meanwhile, he said, local families are having dozens of new babies every week, a boom that a construction freeze would "strangle."

"It'd be a death sentence," he said.