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In two Israeli settlements, a booming demand for more space

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But because these settlements are located relatively close to Israel proper, an agreement on a border modification and land swap is a realistic option for resolving the dispute here. Even though they have moved into the vortex of a decades-old geopolitical dispute, the residents of these communities are not nationalists like those at the forefront Jewish settler movement who seek territorial expansion.

"We didn't come here for politics or to fight. We want to live in the land of Israel, but it doesn't matter where – east or west," says Beitar Illit Mayor Meir Rubenstein. "To our great misfortune, the government put us here and now we're stuck with Obama."

Israel continues settlement expansion

The dispute over settlements has opened up the most public dispute between Israel and the US in about two decades. On Monday, Israel announced it had approved 50 new housing units in a settlement north of Jerusalem to accommodate settlers being moved from an outpost without government approval. In a policy speech earlier this month, Prime Minister Benjamin Netanyahu said that although Israel won't build new settlements, it will permit construction to allow existing communities to expand normally.

Last week, the G-8 and the Quartet of Peace process sponsors joined the call for a complete settlement freeze.

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