"This is not a security wall, these housing units are not intended for security," Erakat told AFP. "This is a land grab."

"They have chosen a policy of settlements and dictation rather than peace and negotiations. It kills the idea of a two-state settlement."

The Israeli housing ministry earlier said a tender had been launched for the construction of more than 550 new homes in Jewish settlements in the West Bank.

The announcement came a day after another controversial decision by Israel to approve the construction of the next phase of its controversial barrier with the West Bank, which it says it needs to prevent infiltrations by Palestinian militants.

The Jewish state will leave a gap over the most controversial section of the barrier, but build smaller fences to protect settlements deep in the territory which are expected to ultimately be connected to the main fence.

Erakat said he would contact the sponsors of the Middle East "roadmap" for peace -- the United States, European Union, United Nations and Russia -- to put pressure on Israel not to go ahead with either project.

He accused Israeli Prime Minister Ariel Sharon's government of trying to impose "a fait accompli".

The "roadmap" calls for an independent Palestinian state living side by side with a secure Israel by 2005.

However, the blueprint has floundered in the face of renewed violence.

Meanwhile, Palestinians are ready for a ceasefire with Israel, but only if foreign observers were in the region to monitor the process, Palestinian leader Yasser Arafat said in an interview published here yesterday.

"Even now we want to cease all hostilities with Israel. But we cannot do without foreign monitors who would watch over such a treaty's implementation," Arafat told Russia's Izvestia daily.

However, Arafat also reiterated his condemnation of Israel's "terror" and "occupation" of Palestinian territories, charging Israel with "violating the UN resolutions and the roadmap plan's conditions."

Arafat even hinted that extremist groups such as Hamas would be welcome in the Palestinian government.

"The government is open to all who are ready to act for the Palestinian people's sake and for the sake of peace. We welcome all who fight Israeli occupation and terror," Arafat said.

Reuters adds: The Palestinian Authority appealed yesterday to world powers steering Middle East peacemaking to stop Israel from going ahead with plans for new barriers deep inside the West Bank.

Palestinian chief negotiator Saeb Erekat said letters to the "Quartet" -- the United States, Russia, European Union and United Nations -- called for urgent action after Israel approved a major new phase of the controversial project Wednesday.