Jerusalem Mayor Nir Barkat on Wednesday called US President Barack Obama's strong criticism of the building of additional Jewish homes in a Jewish neighborhood of the Israeli capital a position based on racism.

Said Barkat:

"Israeli law does not discriminate between Jews, Muslims, and Christians or between eastern and western Jerusalem. The demand to halt construction by religion is not legal in the United States or in any other free place in the world. I do not presume that any government would demand to freeze construction in the United States based on race, religion or gender and the attempt to demand it from Jerusalem is a double standard and inconceivable."

The Jerusalem mayor was responding to Obama's remarks to Fox News earlier in the day, in which the president referred to the approval of 900 new apartments in the southern Jerusalem neighborhood of Gilo as "settlement activity," and suggested that it justified further Palestinian violence.

Many Israeli lawmakers publicly agreed with Barkat, including opposition leader Tzipi Livni, who told visiting French Foreign Minister Bernard Kouchner that "Gilo is part of the Israeli consensus, and that understanding is important for every discussion on the final borders of any future agreement."

Kouchner took a lighter view of the issue than Obama, and told reporters that he didn't feel the construction of additional Jewish apartments in a neighborhood where so many Jews already live should in any way hinder the peace process.

But the Palestinians took their cue from Obama. Chief Palestinian Authority negotiator Saeb Erekat was quick to confirm that the Palestinians, too, view the Jewish presence in Gilo as settlement activity, and do not feel they can make peace with Israel so long as it continues.

Built in 1971, Gilo was a barren hilltop when it was liberated by Israel from illegal Jordanian occupation in the 1967 Six Day War. Today it is home to more than 30,000 Israelis, and an integral part of Jerusalem.

Billions of dollars of US taxpayers' money have been used to advance the cause of Palestinian terror groups against Israel by raising a new generation of young Arabs ready to be recruited for "martyrdom."

In an interview with Arutz 7 Radio, journalist David Bedein said his recent investigations had revealed that Palestinian school textbooks continue to praise the use of terrorist violence against Jews and to deny the legitimacy of the State of Israel.

Those textbooks and the schoolhouses where they are used have been largely paid for by USAID, an American government-funded international aid program that has pumped $2.4 billion into the Palestinian Authority over the past decade.

According to USAID, those funds have been used to "reduce poverty, improve health and education, create jobs and advance democracy." But a USAID official admitted to Bedein that his agency does not check the PA school curriculum it is funding to make sure it complies with the terms of the US-backed peace process.

Incitement to hatred and the encouragement of violence in school textbooks is a violation of Israel's existing agreements with the Palestinians and the US-authored "Road Map" to peace.

Several high-ranking US congressional leaders as well as Secretary of State Hillary Clinton have chided the Palestinians in the past over the venomous textbooks, but have thus far failed to take any punitive action, or to at least reduce pressure on Israel until the Palestinians comply with their peace commitments.

USAID says it plans to invest another $153 million in US taxpayers' money into the Palestinian education system in 2010.

A memorial ceremony held earlier this month to mark the fifth anniversary of Yasser Arafat's death confirmed that Palestinian children have been raised to hate the Jews, and see their deceased leader as a symbol for continued violent confrontation.

The television broadcast of the ceremony on official Palestinian Authority TV included a clip of Palestinian children being interviewed regarding their feelings toward Arafat.

Nearly all of the children insisted that Arafat had been poisoned or otherwise assassinated by "the Jews," with one young girl adding, "I hate them so very much."

Not one child spoke of Arafat's alleged efforts to forge peace between Israel and the Arabs, for which he won a Nobel Peace Prize. In fact, one young Palestinian boy said he idolized Arafat precisely because he "did not make peace," but rather "did things through [violent] struggle."

[Translation provided by Palestinian Media Watch]

Senior Israeli officials on Monday told The Jerusalem Post that Palestinian threats to unilaterally declare independence are a bluff, since the Palestinians know full well they couldn't last a day without Israeli support.

One Israeli army official said that the Palestinian Authority had made some progress in its management of civilian affair, but pointed to its inability to adequately manage and allocate water resources as an example of why it couldn't possibly go independent.

"The Palestinian Water Authority wouldn't last a day on its own," the source said. "We allocated them a piece of land on the coast to build a desalination plant and they have decided not to build it."

Another official noted that any time Palestinian leader Mahmoud Abbas moved outside Ramallah, Israeli security agencies had to ensure his safety since he can't trust enough of his own people.

"When Abbas travels it is like a military operation. Everyone is involved since the PA forces cannot yet completely ensure his security."

The Palestinian Authority's inability to stand on its own two feet has been pointed out by some as the major folly of the Middle East peace process, which would essentially create a welfare state indefinitely dependent on major handouts from the international community and infrastructure maintenance by Israel.

Israeli military officials revealed to The Jerusalem Post this week that the flow of arms into the Gaza Strip has again reached the volumes seen before the Israeli military operation against terrorists there last December and January.

The sources said the arms are being brought in through and estimated 500-1,000 tunnels that run under the short Gaza-Egypt border.

Israeli officials continue to maintain that Egypt could put a total halt to the smuggling in less than a day by setting up military obstructions on its side of the border.

But speculation is that Egypt will never do so because the trade, which includes more than just weapons, is vital to the economy of the Sinai Peninsula, and because aiding Israel in that way could lead to demonstrations that would bring down President Hosni Mubarak's regime.

Some Israeli politicians also believe that Egypt, which despite a peace treaty remains hostile toward Israel, has an interest in allowing Hamas and Israel to bleed one another.