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Israel has asked the World Bank and the U.S. government's development agency, USAID, to stop a study aimed at determining the best method of creating a transportation link between the Gaza Strip and West Bank, according to James Wolfensohn, the Quartet's envoy for the disengagement.

Wolfensohn made the claim in an October 16 letter to the foreign ministers of the Quartet, noting that he called for the study to continue.

The Prime Minister's Office told Haaretz over the weekend that no official Israeli representative had made such a request.

In his letter, Wolfensohn noted that Israel had agreed in 2001 to a sunken road linking the West Bank and Gaza, but in 2004 the new administration called for a rail link instead.

A senior Palestinian official told Haaretz that the Palestinians would rather have a sunken road, which would provide greater freedom of movement and make cargo transport easier. He said that Wolfensohn and the World Bank also prefer a road, pointing out that the World Bank believes it would be cheaper to build and operate than a railroad.

In deference to Israel's views, however, the World Bank agreed a few months ago to conduct a cost-benefit analysis of the two proposals. The U.S. agreed to finance it on condition that both Israel and the Palestinian Authority consented to the study. The study was launched after both Wolfensohn and the World Bank were satisfied that Israel had no objections.

But Haaretz has learned that early this month, after the World Bank sent the study's terms of reference to Israel, a Defense Ministry official sent a letter to the World Bank demanding that the study be halted, and the bank complied.

The Defense Ministry declined to respond, referring questions to the Prime Minister's Office. The PMO said: "No official Israeli representative asked the World Bank to submit or prepare research on a transportation link between Gaza and the West Bank, and therefore it also did not request the cessation of such research." However, it added, USAID recently informed Israel that it has commissioned a study on the subject, and Israel is currently drafting a list of the issues it would like such a study to examine.

Vice Premier Shimon Peres, who is handling the West Bank-Gaza link, will discuss the study's continuation with representatives from the World Bank and USAID.