Updated

Bulldozers cleared rubble and cranes hoisted equipment Tuesday in the largest West Bank (search) settlement a day after criticism from President Bush that clouded a Texas summit with Israel's prime minister. Israel says the work is taking place within existing boundaries and does not constitute expansion.

But Israel's distinction is lost on the Palestinians and possibly the Americans, too. The Bush administration has insisted that Israel stick to a Mideast peace plan that bans all settlement construction.

Israel recently confirmed plans to build an additional 3,650 houses between the settlement, Maaleh Adumim (search), and Jerusalem, five miles to the west — effectively cutting off the Arab section of the city from the rest of the West Bank. Palestinians say this would make it impossible for them to create a state in the West Bank and Gaza with east Jerusalem as its capital.

On Tuesday, finishing touches were being put on apartment buildings at the edge of Maaleh Adumim, home to 30,000 Israelis in the barren Judean desert.

Large cranes carried equipment on and off the buildings, bulldozers removed rubble, workers in yellow hard hats put down cement bricks, and the sound of banging hammers echoed in the air.

Work on some of the buildings began more than a year ago. The construction is not connected to the plan to expand the settlement to complete a Jewish ring around the Jerusalem.

Speaking to reporters Monday, Israeli Prime Minister Ariel Sharon (search) said Israel has built settlements to solidify control over areas of the West Bank it deems vital to its security. "It was not to antagonize the U.S., but to keep areas that seem strategic to Israel," Sharon said.

But at his ranch on Monday, Bush told Sharon that any further building in settlements would violate the "road map" peace plan. Making the dispute public at a news conference after their talk, Bush said: "I've been very clear. Israel has an obligation under the road map. That's no expansion of settlements."

Construction in Maaleh Adumim has continued unabated through various Mideast peace plans, and it proceeded on Tuesday.

"This is not an expansion at all. It's building in Maaleh Adumim territory," said Benny Kashriel, mayor of the settlement. "Expansion is when you are taking more land ... and giving it to Maaleh Adumim."

Kashriel said his settlement is widely considered part of Israel and noted that Bush has indicated in the past that the U.S. considers it part of Israel as well. In 2004, Bush broke with U.S. policy and announced that any final Israeli-Palestinian peace deal would have to take into account existing Jewish population centers.

Israel interpreted that as U.S. approval for its plans to hold on to major settlement blocs around Jerusalem, even as it moves to evacuate Jewish settlers from the Gaza Strip and four West Bank settlements this summer.

A separation barrier Israel is building to keep Palestinian attackers out encircles Maaleh Adumim on the "Israeli" side, further dividing east Jerusalem from the West Bank.

Saeb Erekat, the chief Palestinian negotiator, said Tuesday that there are no legal settlements and urged Israel to halt its construction.

"We hope that Prime Minister Sharon will heed President Bush's call to have a full cessation of settlement activities," Erekat said. "This is Israel's main obligation in the first phase of the road map: to stop all settlement activities." After meeting Israeli Vice Premier Shimon Peres in Tel Aviv, Erekat said Bush's remarks would "re-energize the road map."

Bush presented the road map in June 2003, but it stalled when neither side carried out the initial phase. Israel was to halt settlement activity and Palestinians were to dismantle violent groups responsible for attacking Israelis.

The settlement dispute ruined the impression Sharon was hoping for at his Monday summit in Texas with Bush — warm U.S. political support for his Gaza pullout plan, which is facing stiff domestic opposition.

Reflecting Israeli concerns over that opposition, a senior military officer said Tuesday that 10,000 soldiers would be trained for the evacuation.

The officer, who is involved in preparations for the withdrawal, gave details of five security perimeters to be set up for the pullout.

He said an inner circle, responsible for removing the 9,000 Gaza and West Bank settlers from their homes, would be chosen from among 10,000 soldiers who are to begin training in late May or early June. Policemen will also be part of this inner circle.

Forces in this contingent will not be armed, the officer said.

In keeping with Israeli military policy on contacts with the news media, the officer spoke on condition of anonymity.

The officer said four additional rings of security personnel would be established, to prevent Palestinians from attacking soldiers and settlers and to keep Israeli opponents of the pullout from interfering with the operation.