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Some 55,000 residents of East Jerusalem with Israeli identity cards will remain outside the "Jerusalem envelope," and will in effect be cut off from the city's municipal core, it was revealed in yesterday's cabinet meeting. The cabinet approved a plan for arranging services for the Arab citizens who will remain on the other side of the separation fence.

The government decided that by September 1, when construction of the fence around Jerusalem is to be completed, the Jerusalem Municipality and all government ministries must complete preparations for provision of these services. A sum of NIS 25 million has been allocated for this purpose.

Deputy Prime Minister Ehud Olmert has been authorized to monitor the process. Security forces are to complete the separation fence in Jerusalem only after he reports that the administrative arrangements are in place.

Olmert noted that, according to his plan, some 3,600 schoolchildren will have to be bused to their schools on a daily basis, to the other side of the barrier. He said regular transportation timetables will be instituted to allow those residing outside the fence to continue their daily routines without being compromised.

The following tasks will be undertaken by various bodies:

*Jerusalem's municipality will set up a Jerusalem envelope community administration, to deal with residents of Arab neighborhoods outside the fence. This unit will be responsible for supervising the 12 entryways in the fence, for maintaining order and for setting up municipal service centers nearby.

*The municipality, together with the Education Ministry, will be responsible for busing Arab students back and forth. In the long term, educational facilities will be built on the other side of the separation fence to save costs.

*The Defense Ministry and the Ministry of Public Security will oversee the timely movement of residents on foot, in vehicles and on public transportation through the crossings.

*The Ministry of Health will draw up regulations to allow speedy and humane handling of medical emergencies at the entryways, and to ease passage of physicians and medical equipment. The ministry will be expected to encourage East Jerusalem hospitals to develop "branches" on the other side of the fence.

*The Ministry of Communications and the Israel Postal Authority will set up post offices near the crossings.

*The Welfare Ministry and the National Insurance Institute will be required to provide various services through the postal authority, including phone and Internet services.

*The Ministry of Transportation will arrange special lanes to give public transportation priority at the crossings.

*The Employment Service will open bureaus near the entryways, and allow unemployment recipients living outside the fence to report only once a month.

Minister Without Portfolio Haim Ramon commented that "the gates and openings along the `Jerusalem envelope' fence should remain open and only be closed during emergencies." Ramon said that the services should be of the same level of quality on both sides.

Minister of Construction and Housing Isaac Herzog said that the regulations at the crossings must ensure "human and fair treatment of the Arab citizens who pass through them."

MK Yossi Sarid (Meretz-Yahad) said that "the government decision proves again that the occupation can't be swallowed, but nor can it be spit out. The occupation is stuck like a bone in Israel's throat and is strangling it."

MK Azmi Bshara (Balad) said that the government decision slices through neighborhoods and communities in Jerusalem as if no people were involved, only paper and a ruler. He said that talk of gates and openings and services on the other side of the fence was hypocrisy, which made no impression on the communities who are being riven - besides deep revulsion.

PA Chairman Mahmoud Abbas harshly attacked the plan and said the PA would not accept it. Abbas, who returned to Ramallah from a visit to Syria and Lebanon, said that "approving the fence route in Jerusalem could bring about the end of relations between the two sides. Such steps will not serve peace, nor will they serve Israel's security."