The Cabinet created a furor when it voted Sunday to back the bill.

On Wednesday, however, Cabinet Secretary Gideon Sa’ar announced that the Cabinet would hold another debate on the bill after a request to Prime Minister Ariel Sharon by Labor Party leader Bejamin Ben-Eliezer.

Ben-Eliezer and Foreign Minister Shimon Peres did not take part in Sunday’s vote because they left the Cabinet meeting early to meet with the visiting Egyptian intelligence chief.

This coming Sunday, the government will attempt to transfer the bill to a committee that would change its wording, in an attempt to make it acceptable for Jews and Arabs. The immediate significance of this move, however, would be the bill’s deferral.

The bill was proposed by National Religious Party legislator Haim Druckman to circumvent a March 2000 decision by the High Court of Justice that the state cannot allocate land in a way that discriminates against any Israeli citizens.

The court ruled at the time that the government broke the law when it allocated state-owned land to the Jewish Agency for Israel to build a community that barred Israeli Arabs from having homes there.

The court issued its ruling after the northern community of Katzir refused to permit an Israeli Arab couple to move there.

At Sunday’s weekly Cabinet meeting, 17 ministers voted in favor of the bill, while two opposed and one abstained.

Cabinet minister Dan Meridor, who was one of two ministers to vote against the bill, called the decision a “grave error,” which was “flagrantly discriminatory.”

Attorney General Elyakim Rubinstein said in a statement that he had urged ministers not to support the bill, which he warned would deepen the rift between Israel’s Jewish and Arab communities.

The text of Druckman’s bill says that state land can be allocated to the Jewish Agency for the purpose of achieving the agency’s goals of promoting Jewish settlement in Israel.

The bill states that the establishment of Jewish-only communities is contingent upon approval from the defense minister or ministers responsible for the law’s enforcement that such a move is required because of “security reasons” — or to ensure the character of a community that is built upon certain ideals that all its residents must share.

The Jewish Agency’s chairman, Sallai Meridor, issued a statement Monday saying the Druckman bill “does not contradict the High Court of Justice’s position.”

The court had “determined that there may be circumstances which would justify maintaining” a Jewish-only settlement policy, he said.

Just as the Israel Lands Authority “allocates land to Bedouins and Druse and the matter is understood and accepted,” he said, “it is likewise important that land be allocated to Jewish settlements.”

Before it can become law, the bill must pass three votes in the Knesset. It could also face challenges in the High Court.

The issue was brought before the Cabinet by Education Minister Limor Livnat, after the Ministerial Legislative Committee, which determines the government position regarding proposed legislation, decided against supporting the bill.

Livnat said the Cabinet had voted to fulfill the Zionist ideal of Jewish settlement in all the land of Israel. She was also quoted as calling the government decision a victory for advocates of a Jewish, Zionist and democratic state.

Dan Meridor, the sole minister to speak out against the bill at Sunday’s Cabinet meeting, blasted the decision.

“It is not permissible to allow an Israeli law to state that a non-Jew may be prevented from living in a particular place for security reasons,” Meridor said.

“This is not a security matter at all. There is no need for flagrant discrimination,” Meridor said.

Opposition legislators denounced the Cabinet decision.

Legislator Nehama Ronen of the Meretz Party said the proposed law should be disqualified because it is “racist.”

“The government decisions means that racism has become the official ideology of the State of Israel,” said Israeli Arab legislator Azmi Beshara.

In its March 2000 decision, the High Court ruled 4-1 that the state cannot discriminate between Arabs and Jews in land allocation. The one dissenting judge, Ya’acov Kedmi, agreed that the state has no right to discriminate against Arabs on state lands. But he added that the Jewish Agency, which was formed to promote Jewish settlement in Israel, has the right to decide who can benefit from its resources.

The court issued its ruling after a petition was brought by Adel and Iman Ka’adan, an Israeli Arab couple that wanted to build a house in Katzir.

Following its ruling, the High Court ordered the Katzir membership committee to consider the couple’s candidacy and not base its decision on religion or nationality.

Last year, the community’s membership committee informed the couple that their candidacy had been rejected because they were deemed socially unsuitable.

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