Israel's Cabinet, ignoring Palestinian objections and U.S. misgivings, gave final approval Sunday to a Jerusalem separation barrier meant to stop homicide bombers but that will cut off 55,000 Palestinian residents from the city.

Prime Minister Ariel Sharon (search) last week ordered the acceleration of construction of the Jerusalem segment of the barrier and government ministries have until Sept. 1 to complete their preparations.

The wall around Jerusalem is part of the partially completed barrier along the West Bank (search).

Israel began building a barrier along the West Bank at the height of a suicide bombing campaign by Palestinians more than two years ago. Attackers crossed the unmarked and largely unguarded cease-fire line between the Israel and the West Bank, captured by Israel in the 1967 war, and blew themselves up in Israeli cities, killing hundreds of people.

However, the route of the barrier dips into the West Bank in several places to encircle main settlements, and Palestinian denounce it as a land grab.

In its decision Sunday, the Cabinet said it sees "great importance in the immediate completion of the security fence in the Jerusalem area, in order to improve the level of personal security for the residents of Israel."

The barrier's route around Jerusalem is particularly contentious.

It reshapes the boundaries of the city — claimed by Israelis and Palestinians as a capital — and dramatically changes its demographics.

The barrier leaves four Arab neighborhoods of Jerusalem, with some 55,000 residents, on the West Bank side, while including the largest Jewish West Bank settlement, Maaleh Adumim (search) with close to 30,000 people, on the Jerusalem side.

The fate of Jerusalem was to have been determined in talks on a final peace deal. The Palestinians say the barrier pre-empts the outcome of negotiations, and separates east Jerusalem — the sector they claim for a capital — from its West Bank hinterland.

Israel has portrayed the barrier as a temporary security measure, to keep out Palestinian bombers and gunmen. The United States says Israel has the right to defend itself, but should minimize hardship to Palestinians in drawing the barrier route.

The Cabinet on Sunday approved a plan to build 11 passages through the Jerusalem barrier. The ministers did not explain how they would ensure quick passage of tens of thousands of Arab residents who need to get to schools, jobs and hospitals and the center of the city.

The government said it would build new schools and clinics in the Arab neighborhoods cut off by the barrier.

Vice Premier Ehud Olmert said Sunday that once the barrier around Jerusalem is completed, some 55,000 Palestinian residents of the city would find themselves on the wrong side of the barrier.

Jerusalem has about 700,000 residents, including about 230,000 Palestinians who carry blue Israeli identity cards that identify them as permanent residents, grant them freedom of movement and make them eligible for Israel's social services.

The barrier will slice through four outlying Palestinian neighborhoods of Jerusalem— Kufr Aqab, Anata, Qalandia and the Shufat refugee camp. Residents of these neighborhoods, who have Israeli identity cards, will find themselves on the West Bank side of the divider, making it increasingly difficult for them to get to jobs, schools and hospitals in the city. Some 3,600 students would be among those cut off from the city, Israel Radio said.

Silvia Albina, whose home in Kufr Aqab will fall on the West Bank side, said anxiety about the future may eventually force her to leave and emigrate to the United States.

Albina's 4 year-old daughter Leila goes to nursery school in Jerusalem. Her husband, Tony, owns one of the oldest travel agencies in the heart of the city where family and friends reside. Even with the barrier not yet completed, it takes father and daughter an average of 45 minutes every day to get to Jerusalem because of waiting at army roadblocks. The journey should take only about 15 minutes.

Saeb Erekat, a senior Palestinian official, said Israel must stop building the barrier, which he said was bringing "catastrophe" upon the Palestinians.

"The wall is separating between Palestinians and Palestinians," Erekat said. "We have exerted every possible effort with the Israelis themselves, the Americans, the international community but the only thing that is happening is that the wall is being completed."