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One of the clauses of the 2004 state budget that was not implemented and therefore still has a great deal of leftover money is that of the separation fence. The preeminent project of the Sharon government is bogged down because of legal and diplomatic problems. Internal and international interest in the construction of the fence has waned in the wake of the slowing down of terror from the West Bank, Yasser Arafat's death and the hopes of renewing the diplomatic process.

Uzi Dayan, who heads the Public Council for a Security Fence for Israel, has accused the government of protracted dysfunction since only one-third of the fence has been completed, even though a year has passed since the cabinet decided on the fence's route.

According to Defense Ministry data, the fence has so far been constructed between Kibbutz Tirat Zvi in the Beit She'an Valley and the settlement of Elkana in Samaria, and another small section has been built around Jerusalem. Work is continuing at a slow pace in several spots near the Green Line, and a local fence is being constructed around the West Bank town of Ariel. Another section is awaiting court rulings after the Palestinians petitioned; it is expected to end in a compromise. The problem of crossing points has not yet been solved.

The sensitive issues are still open: joining the settlement blocs to the main route of the fence, its construction around Jerusalem, the route to be taken in the Hebron foothills area that will be moved to the Green Line. Everyone has been trapped between Sharon's political problems and diplomatic developments, and between former prime minister Benjamin Netanyahu and U.S. President George Bush.

Sharon has to bring the new fence route in the Hebron foothills and Gush Etzion to the cabinet for approval, but there he will come up against the right-wing ministers who will protest against the "concessions" and demand compensation in the form of additional settlements. It will be an impossible situation: Any proposal to penetrate more deeply into the West Bank, particularly if the current relatively quiet spell continues, will be interpreted in the world as a confidence-destroying measure that will trip up Arafat's successors. The result is further delays in decision-making.

Arafat's last successful international media and diplomatic success was to stop the construction of the fence before it created facts on the ground by annexing areas inside the West Bank. Sharon was forced to say good-bye to the eastern fence, which was supposed to isolate the Palestinian towns from the Jordan Valley, to move several sections to the Green Line and to delay joining the settlement blocs to the main route of the fence.

Now that Arafat is dead and the world is expecting elections in the Palestinian Authority and the renewal of the negotiations, the Americans will not permit Sharon to build in Ariel or Ma'aleh Adumim. The prime minister will have to wait before implementing his promise to compensate for the withdrawal from Gaza by "strengthening the hold" on the West Bank.

In September, the prime minister's adviser, Dov Weisglass, visited the White House to present the corrected version of the fence's route that will surround the settlements in the Ma'aleh Adumim, Gush Etzion and Ariel blocs, as well as the "Jerusalem envelope," and will move closer to the Green Line in other areas. When he returned home, there were reports that everything was in order and that "the Americans did not make any comments."

The American version was that the Israelis gave details only of the section of the fence that was rejected by the High Court of Justice and had to be replanned, between Modi'in and Jerusalem. With regard to Ariel, Israeli sources said there were "two or three alternatives," and that Sharon had not yet made up his mind among them. They said the decision on the route in Jerusalem was even further from being taken because of the demographic complications in the area. The Americans decided to keep mum until they saw the final route.

Sources in Sharon's bureau describe the fence as one of the central elements in the conception of Israel's security, saying that its completion will make it possible for Israel to feel safer and to take greater chances in future negotiations over the West Bank. That is why its construction will be completed, but the decisions must be timed with discretion.

Defense officials talks of "gaps" being left opposite the settlements blocs, while the main route of the fence is kept close to the Green Line until a diplomatic solution is reached. The trouble with this policy is that it is a gamble, because its assumption is that everything will be all right and there will be no terror attacks until such time as Sharon has the opportunity to place the settlement blocs inside the project. Until such a date, large sections of the country will remain exposed to penetration from the West Bank.