Mayor Benny Kashriel sits in his office on the top floor of City Hall in Ma'aleh Adumim. His window looks out over one of the many flower-lined boulevards and squares that dot this city, located only a seven-minute drive east of Jerusalem on the road to Jericho.

A popular three-term mayor, who is running unopposed for his fourth term this November, Kashriel's name has become synonymous with Ma'aleh Adumim. He has helped transform it from a low-cost alternative to Jerusalem to one of the cleanest and best run cities in Israel, with a quality of life few other municipalities rival.

In the 31 years since it was established, Ma'aleh Adumim has grown from 23 families to some 34,000 people. During this time, there has hardly been one day when the city was not building new housing and expanding. But all this may end, as Ma'aleh Adumim seems poised to run out of land for residential building.

"Today, the land we have for residential building in the new neighborhood of Nofei Hasela is running out," says Kashriel. "We have land for only some 400 more apartments. Our city has a natural growth of 700 persons annually and we need about 200 new housing units a year. In two years, there will be nowhere for our children who marry and want to stay here to live, let alone new families who want to move here. The only future land we have for residential building is E-1. There is simply no other land in Ma'aleh Adumim for this. In E-1, we can build 3,500 new residential units."

At a time when the Israeli and foreign press are reporting a renewed building boom in Judea and Samaria (despite the freeze Israel declared on new permits for construction after Annapolis in November 2007), why is Ma'aleh Adumim being denied the final go-ahead to build residential housing in the E-1 area that is part of its municipal jurisdiction, a denial Kashriel claims will result in the city being choked off from natural growth within the next two years?

It is difficult, however, to determine just how many housing units have been approved since Annapolis because it all depends on how one defines "approved," from issued tenders to a general go-ahead.

According to a recent report on the McClatchy Web site, companies have been asked to start building some 1,700 units over the Green Line since Annapolis. And in April, the Israeli press reported on government plans to build 1,900 units in the area in 2008. These figures do not include building in east Jerusalem.

The spokesman's office of the Construction and Housing Ministry, when asked by In Jerusalem how many residential units had been approved by the government for 2008, responded: "The number of residential units for 2008 beyond the Green Line [excluding Jerusalem] is 286 units in Betar Illit." Apparently the ministry was relating only to units for which the Israel Lands Administration had published tenders.

However in February, the press reported that 94 units had been approved for Modi'in Illit, in March 750 units for Givat Ze'ev and 80 for Elazar in Gush Etzion. In addition, in April, Betar Illit received approval for 800 new units, and in July, the government announced tentative plans for two dozen homes in Maskiot in the Jordan Valley.

"I don't know about 1,900 or 1,700 units being approved for Judea and Samaria," says Pinhas Wallerstein, director-general of the Council of Jewish Communities of Judea, Samaria and the Gaza Strip. "You have to understand that most of what is being reported as approved is building that has been delayed and is now being given the go-ahead. Betar Illit is actually new building."

Kashriel is perplexed by the developments. "Ma'aleh Adumim was established legally by the Israeli government and is at the heart of the Israeli consensus concerning land Israel intends to retain beyond the Green Line, yet we are being denied building in E-1."

But there seems to be more at work here than "the heart of the consensus." The majority of units approved since Annapolis are intended for the haredi community, specifically those close to or affiliated with Shas. These include the units approved for Modi'in Illit, Betar Illit and a new haredi neighborhood in Givat Ze'ev.

It has been widely reported that the decision to build in these communities is connected with keeping Shas in the shaky government coalition. Kashriel, as a member of Likud, the opposition, finds himself with limited leverage in the government.

"Shas can play pressure politics on the [prime minister Ehud] Olmert government because it is part of the government," explains Likud MK Reuven Rivlin.

"There are two reasons why building has been approved for other areas and not E-1," adds Wallerstein. "One is that the haredim are needed for the government coalition; not building in E-1 is not going to cause the coalition to fall apart. And two, the significance of E-1."

Indeed, both the Palestinians and the US have consistently opposed building in E-1, arguing that construction in the area would cut a future Palestinian state in two, a claim Kashriel adamantly denies. And of late, more and more Palestinian and left-wing Israeli voices are saying that building in E-1 would be the deal breaker for a two-state solution to the conflict.

E-1, short for East 1 and also known as Mevaseret Adumim, is a nearly 12-square-kilometer (12,000 dunams) mostly empty area, located within Ma'aleh Adumim's municipal limits, on the opposite side of Road 1 to Jericho from the city's currently developed sections. It is bordered by Jerusalem's French Hill neighborhood to the west, Abu Dis to the southwest, Kedar to the south, the present built-up areas of Ma'aleh Adumim to the east and Almon to the north.

The overall plan for E-1, in addition to the housing units (both apartment buildings and villas to be built in three sub-neighborhoods), includes five hotels, a commercial center and the police headquarters for Judea and Samaria. Some 75 percent of E-1 is to be preserved as a forested park of the Jewish National Fund.

The entire project is supposed to be completed by 2020. To date, only the police headquarters has been completed, with police operations transferred to E-1 this spring. Inauguration of the police headquarters was reportedly postponed twice because of US opposition - once when US President George W. Bush visited Israel in January, and then again when US Secretary of State Condoleezza Rice came in March.

Adjacent to E-1, on the territorial strip connecting Ma'aleh Adumim to Jerusalem, is envisioned an economic development zone: the Ma'aleh Adumim Employment and Commerce Center (ECC). A joint venture of the Ma'aleh Adumim and Jerusalem municipalities, the ECC would serve as a greater metropolitan industrial and commercial zone serving all communities in the Jerusalem area.

In addition to providing thousands of jobs (to Palestinians as well as Israelis), the ECC would enable Jerusalem to evacuate aging industrial areas within the city (Givat Shaul, Talpiot, Mekor Baruch) and convert the land to much-needed residential housing.

In the wake of the demise of the Safdie Plan to build 20,000 housing units in the hills west of Jerusalem, the idea of an eastward expansion has been bandied about as a possible solution to the capital's housing crunch.

Building plans have been approved for ECC as well, but the project is currently on hold. Kashriel says that the ECC is not economical at this point, and would like, instead, to concentrate on strengthening the city's existing industrial area, Mishor Adumim.

The Jerusalem Municipality says that the decision to develop the ECC is in the hands of the government, and that the municipality is concentrating on developing industry and commerce in Har Hotzvim, Malha and Atarot.

E-1 was annexed to the Ma'aleh Adumim Municipality in 1994 by the government of Yitzhak Rabin, which also planned and approved the area's general building plan. A more detailed building plan was approved by the Binyamin Netanyahu government. The Ehud Barak government also supported and promoted building in the area, as did Ariel Sharon's government, which pushed for the building of the police headquarters.

"E-1 is a natural part of Ma'aleh Adumim. It is entirely on government -owned land," says Kashriel. "None of it is on privately owned Arab land. The E-1 plan has passed all the committees and received all the necessary permits.

"Building in E-1 is in the natural interest of the residents of Jerusalem and its surroundings. Every Israeli government has supported this plan. The plan now sits on the prime minister's desk awaiting his final go-ahead. This is what is holding it up."

Kashriel Hasn't kept his frustrations on the matter silent. On Israel's 60th Independence Day, the mayor went public with his dissatisfaction about the delays in final government approval, taking his case to an E-1 hilltop.

Sitting in a protest tent near the completed police headquarters, Kashriel set up detailed maps and aerial photos to explain to the public the importance of E-1 to his community's future, and how building there would not divide any future Palestinian state.

Kashriel explains: "The Americans have always been against any building beyond the Green Line, even in Jerusalem. This is not a new policy on their part. The US objected to Ma'aleh Adumim when it was established, but all previous Israeli governments continued to build in those areas they saw as being in the national interest of the population of Jerusalem and its surroundings. Only this government has given in to the US pressure."

According to Haim Erlich, coordinator of policy advocacy for Ir Amim, a non-profit organization that works for coexistence in Jerusalem, building in E-1 is designed to create a wedge between east Jerusalem and the rest of the West Bank, and will split the West Bank in two.

"This is not about the innocent building of Ma'aleh Adumim or connecting Ma'aleh Adumim to Jerusalem," says Erlich. "If we want to create a sustainable Palestinian state with territorial contiguity, we cannot build in E-1. If Benny Kashriel wants a binational state, then building in E-1 is the way to get it. Construction there will make it impossible to divide between Palestine and Israel. Therefore, building in E-1 is not in the interest of the State of Israel.

"We have to ask if our policy will lead to two states or a binational one," he continues. "If Israel wants a binational solution, then Ma'aleh Adumim can stretch from Jerusalem to the Jordan. But if we want a two-state solution, then we have to know that building in E-1 is of strategic significance and will effectively end negotiations with the Palestinians for a two-state solution."

His words are echoed by Jihad Abu Zneid, a deputy in the Palestinian Legislative Council and a resident of Shuafat. "Building in E-1 is against UN resolutions and all agreements between Palestinians and Israelis to date," she says. "We [the Palestinians] believe that this is an attempt at determining facts on the ground and at isolating east Jerusalem from the West Bank.

"Building in E-1 will destroy the link between Jerusalem and the West Bank, both physically and psychologically, and without Jerusalem, there can be no solution to the conflict," she continues. "E-1 construction will destroy any hope for a real, comprehensive solution. The two-state solution will no longer be available and this will lead to a new conflict. Building in E-1 destroys all hope for a Palestinian state."

Kashriel insists that "building in E-1 will not divide a Palestinian state in two. Everyone knows this. What is going on here is disinformation. This is the disinformation that the Palestinians have told the Americans. We [officials of Ma'aleh Adumim] have gone to the Americans with detailed maps to show them that this is simply not true. We have also gone to the Foreign Ministry, the Defense Ministry and the Prime Minister's Office."

The connection between the Palestinian centers south of Jerusalem (Hebron and Bethlehem) and those north of the city (Ramallah and Samaria) will be provided by a network of separate roads free of Israeli checkpoints and barriers, says Kashriel. This will also be true for the connection between Jerusalem and Jericho in the east, he adds.

"There is a road already planned and approved that will run from Eizariya [east of Jerusalem and west of Ma'aleh Adumim] to A-Zayim and on to Hizma," Kashriel explains. "This road will connect with the existing road from Hebron to Bethlehem to Eizariya. It will also hook up with the road from Hizma to Ramallah and will thus enable Palestinians to have free passage, with no checkpoints or barriers along the way from Hebron to Ramallah. This route will be even shorter than the route Palestinians currently take.

"The section from A-Zayim to Hizma is already paved, but the section from Eizariya to A-Zayim still needs to be built. Building this section, to be carried out by the Defense Ministry, will cost between NIS 80 million to NIS 100m. The road was approved a year ago but is being held up by the Treasury over financing," he says.

"With respect to connecting Jerusalem with Jericho," Kashriel continues, "there is Road 80 now in the planning stages, which will run north of E-1. This will also not have any checkpoints or barriers. Road 80 will cost NIS 60m. and is also being held up because of financing."

But for Erlich "a road is not territorial contiguity, it is transportation contiguity."

Rivlin couldn't agree more, but for opposite reasons. If Ma'aleh Adumim is not territorially connected to Jerusalem by E-1, and not a road alone, he envisions it "ending up cut off from the rest of Israel like Mount Scopus was from 1947 to 1967. Everyone who sees Ma'aleh Adumim as part of Israel understands the need for territorial contiguity. Ma'aleh Adumim cannot continue to exist if all the area connecting it to Jerusalem becomes densely populated with Palestinians. This will only lead to putting the city in danger of terror attacks."

"I see it as a very serious error not to build in E-1," Rivlin continues. "Connecting Ma'aleh Adumim to Jerusalem through E-1 is what will give the city the ability to continue to exist under any future agreement. The American position against building there is against Israel's vital national and security interests. This has been the opinion of both Labor and Likud governments. The Americans understand when we stand firm on our vital interests. Unfortunately, the present government is not weighing our vital interests."

"E-1 is the key to Jerusalem's security," insists Wallerstein. "Building in E-1 will create a continuous area from French Hill to Ma'aleh Adumim. The minute E-1 is filled with Jewish building, then we have closed the corridor from Abu Dis to Ramallah. Not building will endanger parts of Jerusalem."

Joel Guberman has lived in Ma'aleh Adumim for more than 15 years. "Any limitation on the natural growth of Ma'aleh Adumim is automatically limiting the city's potential," he says. "I have older children. Housing costs are now very high in Ma'aleh Adumim and apartments are in great demand. I would like it if in a few years, when my children marry, they could remain in the city. But I am not sure that this will be a possibility without building in E-1.

"But E-1 is more than a matter of housing or security," he adds. "It belongs to us and there is no reason why we should not be building and developing this area so Ma'aleh Adumim can be connected to Jerusalem."

"I am really worried," says Antony Ordman, who has lived in Ma'aleh Adumim for 23 years. "The Olmert government is sending signals that show that the Palestinians can control settlement building, even in Ma'aleh Adumim. I don't like the idea that for the first time an Israeli prime minister has stopped building in Ma'aleh Adumim. Rabin, Peres, Barak, Bibi [Netanyahu], Sharon never touched Ma'aleh Adumim. They all said it was part of the consensus. Olmert has given in on a big issue that no other politician has.

"The political impact is very worrisome. Something is going on here and it is not nice. This is politically bad news and very scary. I am not sure enough people have woken up to this."

Another Ma'aleh Adumim resident, Michael, says that not building in E-1 shows a hesitation on the part of the government to commit to Ma'aleh Adumim.

"For the security of our city, E-1 is essential. It will help to protect the road [from Mount Scopus to Ma'aleh Adumim]. Already when you drive on the road, the Arab villages are building down toward it. If we don't build in E-1, what is to prevent the Palestinians from building there and turning Ma'aleh Adumim into a compromised area?

"We have been told that the major settlement blocs, like Ma'aleh Adumim, will be part of Israel no matter what," he continues. "If the government is committed to this, why not commit to building in E-1? We are being left hanging. Nothing is sacred any more and we are not as secure as we would like to be."

Kashriel still holds out some hope that the present government will approve building in E-1. "It would be a great pity for it [the present government] to betray previous government decisions concerning E-1. But if it does not approve building in E-1, then we hope that the next government will. In the meantime, we will continue to fight by all legal means for building in E-1. We intend to lobby MKs and government officials and provide accurate information to the public."