Interior Minister Eli Yishai said on Monday that Israel must go ahead with plans to expand a settlement enclave near Jerusalem despite U.S. objections.

While touring the E-1 corridor, Yishai called for continued construction in the contentious corridor between the Ma'aleh Adumim settlement and Jerusalem, and said he hoped Israel would succeed in convincing the U.S. to approve construction.

"There is no doubt that the new [U.S.] administration is different from the last, and this obligates us to make great efforts in order to convince the Americans" to allow such construction, Yishai said.

According to Yishai, the Bush administration had "made clear comments" regarding its acceptance of construction in that area. "I hope we can convince the Americans to allow this construction," Yishai said.

"If we don't succeed, we must honor previous commitments anyway. Israel must do what it believes and the Americans understand that there is no escape from our crucial security need to continue with this construction," he said.

"You cannot tell us we must not build within the settlement blocs," said Yishai, whose Shas party holds a pivotal number of seats in Netanyahu's four-month-old coalition.

Knesset Speaker Reuven Rivlin, who accompanied Yishai on the tour, seconded calls for construction, saying: "If we don't build here, the Palestinians will."

"If the Palestinians build here, they will cut Jerusalem off from Ma'aleh Adumim," said Rivlin. "Without E-1, Ma'aleh Adumum will be like Mount Scopus was from 1948 until 1967."

Israel invested close to NIS 200 million over the past two years in preparing infrastructure for construction of housing units to create a contiguous block between Ma'aleh Adumim and East Jerusalem, Haaretz reported in February.

The neighborhood of Mevaseret Adumim, slated to be built on Area A1, has so far not been built because of strong American opposition. However the construction of a police base in May 2008 opened a window for massive construction in the area.

Peace Now slams Barak for endorsing East Jerusalem construction

Meanwhile, the Israeli settlement watchdog Peace Now on Monday slammed Defense Minister Ehud Barak for endorsing construction in a Muslim area of East Jerusalem in the face of U.S. and international opposition.

Barak, who leads the dovish Labor Party, attended the dedication of a new
Torah scroll at the Ohel Yitzhak synagogue in the Muslim Quarter of the walled Old City on Sunday. The synagogue site was acquired in 1994 by a foundation backed by U.S. bingo mogul Irving Moskowitz and the building opened last year.

A synagogue was first erected at the site in 1867 but abandoned during
anti-Jewish rioting in 1936.

It is close to the Western Wall, Judaism's most revered prayer site, and the Jewish quarter. It is also near the Old City's most volatile piece of real estate - a shrine known to Jews as the Temple Mount and to Muslims as the Noble Sanctuary.

A Peace Now statement Monday accused Barak of seeking to curry favor with the Israeli right with his visit, while abandoning his own constituency.

"The Labor chairman should condemn destructive actions such as that of Moskowitz in east Jerusalem and fight the rightist organizations," it said.

Barak's office said in reply that he had believed the synagogue to be part of the Western Wall complex of prayer sites and tunnels and had been unaware of Moskowitz's involvement. He attended in his role of Defense Minister as the Torah scroll had been donated by a prominent supporter of a soldiers' welfare association.

"The Defense Minister does not need to apologize for going to a ceremony
dedicating a Torah scroll at a synagogue built by Jews 142 years ago," it said in a statement.

Israel captured east Jerusalem in the 1967 Six-Day War and annexed it shortly afterward.

No other country recognizes the annexation, and the international community regards Israeli construction there as no different to settlements in the West Bank. The Palestinians claim the area as the capital of a future Palestinian state.

Israel asserts its sovereignty of the entire city and says it will never
concede control of the eastern part. About 180,000 Israelis live in the East Jerusalem neighborhoods built over the past 40 years.

Moskowitz is behind other Jewish projects in east Jerusalem including a plan to build 20 apartments on the site of the abandoned Shepherd Hotel, which he bought in 1985.

The project has angered the Obama administration. Washington is seeking to pressure a reluctant Israel to declare a total settlement freeze.