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Labor Party moves to approve housing on the West Bank

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Profit vs. principle. This is the argument in Israel's opposition Labor Party debate over whether to approve building by Labor-controlled construction firms of homes for Jewish settlers in the occupied West Bank - despite the Labor movement's opposition to Jewish settlements in areas densely populated by Palestinian Arabs.

So far, the central committee of the Histadrut, the trade union federation, founded and still controlled by the Labor movement, has given the green light for its companies to build. Since government funds are rapidly being shifted away from building inside Israel proper into the occupied territories, the managements of the companies argue that they have to win contracts on the West Bank to keep their workers employed.

The ideological debate thus stirred within the Labor Party is a consequence of current Israeli government strategy to speed up Jewish settlement in the West Bank and Gaza Strip. ''Official plans for continuing settlements of the territories,'' writes Yosef Goell in a study of settlements for the Jerusalem Post, ''are being based on the harnessing of pressing personal needs and of the profit motive to the expansion of the Israeli presence in the territories.''

The shift of government construction funds into the territories is one of a growing number of economic incentives aimed at increasing the numbers of Jewish settlers. These incentives are being offered despite President Ronald Reagan's call - in his Middle East peace initiative - for a settlement freeze as the key prerequisite to drawing King Hussein of Jordan into peace negotiations with Israel over the future of the West Bank.

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