The backhoes are busy on housing plots for this new Israeli settlement in the Jordan Valley, and young families, under army guard and toting M-16s, have begun cultivating dozens of acres of land with dates, olives and other crops.

To the south, a water pipeline from Jerusalem has let veteran farmers double the land irrigated for date trees to 9,000 acres, with a second pipeline and more farmland expansion planned.

As the United States tries to restart peace talks between Israel and the Palestinians, the Jordan Valley is emerging as a key point of contention: Palestinians envision it as a core part of a future Palestinian state, and Israeli officials forcefully assert a longstanding claim that control over the area is vital to their security.

The new settlement of Maskiot and the expansion of farmland are just two tangible signs of tension over the area. When Palestinian Prime Minister Salam Fayyad issued a two-year development plan, he said he wanted to place a Palestinian-controlled airport in the Jordan Valley, and he recently said that any state that does not include it would be "Mickey Mouse."

Israeli officials and others close to Prime Minister Binyamin Netanyahu have been saying that the Jordan Valley should remain in Israeli hands, encircling any Palestinian state to the east and controlling the international border with Jordan -- steps needed, they say, to make sure militant groups don't infiltrate.

The Jordan Valley, which makes up about 25 percent of the West Bank, is almost entirely under Israeli control, with an electronic fence running the length of the eastern border facing Jordan.

It is an argument that recalls Israel's initial occupation of the West Bank after the 1967 Arab-Israeli war, when the Labor Party government viewed the Jordan Valley as a security buffer against an Arab invasion and began authorizing the first settlements to create what was intended as a permanent Israeli presence.
'Something worrying'

Visions of a million Israelis living in the area never materialized -- about 8,000 live there. But Palestinians say they see a similar logic at work -- whether it is the spurt of building at Maskiot, expansion of farmland by the roughly two dozen kibbutz and moshav farming communities in the region, or an upswing in the demolition of Palestinian homes and other structures built outside the narrowly defined areas allotted them.

While the city of Jericho is under Palestinian control, permission for Palestinians to build, irrigate fields or sink water wells elsewhere in the Jordan Valley is tightly proscribed; travel by Palestinians from outside the area is restricted.

In contrast to the construction at Maskiot, where an embryonic settlement of eight families is due to expand to 100, Palestinians say that even small shelters added onto cramped family compounds to house adult children are being demolished, as are Bedouin encampments. In some developed areas, service from the Israeli water network is limited to every fourth day.

"There is something worrying," Fayyad said at a recent news conference in which he spoke in detail about what he sees as a developing fight with Israel over "Area C" -- the approximately 60 percent of the West Bank that, under the Oslo Accords of the early 1990s, is under full Israeli civil and military control.

That includes the Jordan Valley, an area that Fayyad has cited as a vital economic and logistical resource for a future state. Along with agriculture and tourism, the Jordan Valley -- which includes the Dead Sea and its potential for resort and mineral development -- would provide independent access to the world beyond Israel for Palestinian goods and people. The area's sparsely populated plains and hillsides have been mentioned as a place to resettle Palestinian refugees returning from abroad.

Israeli officials "are talking about the Jordan Valley and making it clear that it is not part of the calculation" in new negotiations, Fayyad said. "If that is not part of the calculation, then I say forget it."

Where to draw borders?

The issue is an obstacle that the Obama administration faces as it tries to develop the parameters or "starting point" for renewed discussions.

Negotiations between the Palestinians and previous Israeli prime ministers included offers under which virtually all of the West Bank would be turned over to the Palestinians, and Fayyad and other officials have said they think that should be the aim of any talks. Heavily settled blocs of land, near the likely border between the two countries, may be subject to a land swap, but central parts of the West Bank, such as the Jordan Valley, are presumed by Palestinians to be integral to their state-building venture.

In a speech in June, Netanyahu laid out conditions under which he would accept a Palestinian state, but he has not spoken in detail about dividing West Bank land. Aides have said he is unlikely to offer as much as previous prime ministers, and Netanyahu has said that the "green line" that separated Israel from Arab troops before the 1967 war would not be an acceptable border.

The green line is "indefensible, something that is unacceptable to me," Netanyahu said in an interview in September with the Israel Today daily. "Israel needs defensible borders and also the ongoing ability to defend itself."

That is certainly the view from Maskiot, where settlers such as Yosi Chazut are confident they have a permanent home. Chazut, 30, was among the thousands of Israelis removed from settlements in the Gaza Strip when Israel left the area in 2005. The government let him and his wife and three children settle here a year and a half ago with a long-range plan to develop the surrounding hillsides.

During one of Netanyahu's visits to Maskiot, "he said clearly -- the Jordan Valley remains in Israeli hands in every future negotiation," Chazut said.

Along the edges of the Palestinian village of Jiftlik, a slender stretch of farmland, Jordan Valley activist Fateh Khederat noted that the valley was the scene of a double displacement during the creation of Israel.

Thousands of people ended up in the Jordan Valley after leaving or being forced from their homes during Israel's 1948 war of independence, then left again in 1967 when the conflict pushed eastward into the West Bank, which up until then had been under Jordanian control.

"If they keep the Jordan Valley, they control all of Palestine," Khederat said. "Then Israel will be the middleman between us and the rest of the world."