Israeli Cabinet expands its list of subsidy-eligible settlements JERUSALEM - The Israeli Cabinet on Sunday expanded its list of West Bank settlements eligible for government subsidies, a decision that came days after the resumption of long-frozen peace talks and drew quick Palestinian condemnation. The Cabinet approved housing subsidies and loans for more than 600 Israeli communities deemed "national priority areas," expanding an earlier list. The list includes poor towns in Israel's outlying areas, but also dozens of settlements. The Palestinians want to establish a state on land Israel captured in 1967 in the West Bank, Gaza and East Jerusalem. A key issue in renewed talks is where to draw the borders. Israel has built dozens of settlements on war-won land that are home to about 560,000 Israelis. Israel hopes to encourage more people to move to communities on the "national priorities" list. The Israeli anti-settlement group Peace Now said the list approved Sunday increased the number of settlements eligible for subsidies to 91 from 85, virtually all in areas Israel probably would have to evacuate to make way for a Palestinian state. Hanan Ashrawi, a member of the Palestinian negotiating team, said Sunday's vote affirms Palestinian suspicions that Israel seeks the diplomatic shield of negotiations but has no real interest in reaching a deal. "This is exactly what Israel wants," she said. This will have a destructive impact, and it seems to me it's up to the sponsors, the United States and the international community, to make Israel desist immediately. Israeli government spokesman Mark Regev said any housing or infrastructure subsidies for settlements require additional government approval.