New construction would link Maale Adumim to Jerusalem and could cut Palestinians off from the city they seek to share as the capital of a future independent state. It would flout a US-backed "road map" for peace.

News of the project drew fury from Palestinians, who suspect Israel will strengthen its hold on big chunks of the West Bank while trying to distract attention with a plan to uproot smaller settlements in the occupied Gaza Strip next year.

Political sources said Sharon recently put into action a decade-old plan to develop 3,750 acres of West Bank land linking Maale Adumim to Jerusalem. Some roads had already been marked out and sewage pipes laid, they said.

The latest storm over Maale Adumim followed revelations this week that Sharon had approved 600 new housing units for the suburban-stylm settlement. The details of the new expansion looked much bigger.

Maale Adumim's mayor said house building in the new area could begin in mid-2005, just as Sharon is due to begin removal of Gaza Strip settlements under a plan to "disengage" from almost four years of conflict with the Palestinians.

Maale Adumim already has nearly four times as many residents as the 8,000 Jews who would leave the Gaza Strip.

"Within about half a year the planning in the Construction and Housing Ministry will be completed, such that the residential blueprint can be submitted to the defense minister for approval," Mayor Benny Kashriel told Maariv newspaper.

The United States has criticized the plan for building more houses at Maale Adumim and asked Israel to abide by an undertaking not to expand settlements on land it captured from Jordan and Egypt in the 1967 Middle East war.

White House envoy Mlliot Abrams would raise the issue with Sharon aides on Thursday, US officials said. All settlement expansion is meant to be halted under a peace "road map" that has been stymied by violence. The international community regards the settlements as illegal. Israel disputes this.