"The great United States is our friend, but there are times when we have to say, even to the United States, that we will act in accordance with our interests," Livnat told Israel Government Radio. She noted that implicit in declarations by U.S. President George W. Bush that Israel can expect to retain the city "is the necessity and acceptability of building up the settlement blocs."



Livnat said the expulsion of Jewish residents from Gaza and northern Samaria presents Israel with "a window of opportunity" to strengthen larger population centers in Judea and Samaria.



The city of Ma'aleh Adumim, located 3.5 miles east of Jerusalem, has become politically significant as a fundamental test of different policies of Israel, the United States and the Palestinian Authority (PA). Israel intends to include the city inside the security fence and provide contiguous Jewish presence from Ma'aleh Adumim to Jerusalem.



Expansion of the city also would prevent the Palestinian Authority (PA) from establishing a contiguous residential north-south link between Ramallah and Jerusalem, which the PA wants to declare as capital of a new Arab state. The Bush administration has stated that Israel should retain major population centers in Judea and Samaria but also has maintained that their fate will be determined by negotiations.



Livnat, like former Finance Minister Binyamin (Bibi) Netanyahu, opposed the expulsion plan during Knesset debates but backed it in several Knesset and Cabinet votes, except for the final vote last month at which there was no chance of defeating it.



She has stated in the past she would like to become Likud party leader in the future, but for the time being is playing the role of mediator between Prime Minister Ariel Sharon and his challengers Netanyahu and anti-expulsion leader MK Dr. Uzi Landau who are trying to unseat Sharon as party leader. Landau campaigned in Jerusalem's popular Mahaneh Yehudah market on Tuesday.



Sharon, who is trying to fend off the contenders, also is promoting building large population centers in Judea and Samaria while refraining from offending the American government. The office of Defense Minister Shaul Mofaz, who has worked in tandem with Sharon's policies, announced Monday the approval for 117 more homes in the Samaria city of Ariel, about 15 miles east of Tel Aviv.



But the Defense Ministry tried to play down an announcement by Mofaz' Deputy Minister Zev Boim that the government has approved building 3,000 new housing units in Ariel. Ministry aides insisted that there are no permits for a large expansion. Boim made the statement while touring Ariel with the city's mayor Ron Nachman, who announced he plans to expand the city's population from 18,000 to 30,000.



Housing Minister Yitzchak Herzog (Labor) insisted there are no plans for immediate construction anywhere in Judea and Samaria, and he accused Likud politicians of causing Israel political damage. "All of us suffer…from panic in the Likud where everyone wants to show who is more right [wing] than the other," he said Tuesday. "There is a possibility of future construction but there is no intention to build now."



Palestinian Authority (PA) chief negotiator Saeb Erakat said that building 3,000 new units "would put 3,000 new obstacles before the peace process," according to the PA official web site.