Israelis were warned on illegality of settlements in 1967 memo

A "top secret" memo by the Foreign Ministry's then legal counsel said that would "contravene the explicit provisions of the Fourth Geneva Convention". Growth of Jewish settlements over the next three decades followed.

The official advice that a policy which is now a major obstacle to a peaceful settlement of the Israeli-Palestinian conflict had no basis in international law has been highlighted by the Israeli historian, Gershom Gorenberg. His new book, The Accidental Empire: Israel and the Birth of the Settlements will generate fresh debate on the legality of the West Bank settlements in the wake of Ariel Sharon's decision to withdraw 8,500 settlers from Gaza last August.

Most of the international community has held that Jewish settlement in the territories seized in the 1967 war contravened international law, and the Geneva Conventions in particular, but this has long been publicly contested by Israel.

The highly classified internal advice was given by Theodor Meron, who left Israel a decade later and became a leading international jurist who until the end of last year was president of the International Criminal Tribunal for the former Yugoslavia.

After the 1967 Israeli prime minister, Levi Eshkol, made it known he wanted settlements in the Golan Heights, seized from Syria in the war, and in the Jordan Valley, to make Israel's borders more defensible, Mr Meron was asked whether international law allowed such settlement.

The counsel sanctioned short-term settlement "by military bodies rather than civilian ones", but explicitly ruled out civilian settlements which were energetically established by successive Israel governments, leading to an Israeli population of more than 240,00 in the West Bank today.

The Israeli acting Prime Minister, Ehud Olmert, has made it clear that while Israel is prepared to withdraw further settlements from the West Bank, it intends, unilaterally if it cannot reach a negotiated peace deal, to annex territory occupied by others, including the three big settlement blocks of Ma'ale Admumim, Gush Etzion and Ariel.

The Prime Minister, Ariel Sharon, 78, who is still in a coma, had secured assurances from President George Bush that borders in a "final status" agreement with the Palestinians would allow such blocks to remain in Israel.

Mr Meron's advice, also referred to in another recent book on the 1967 war and its aftermath by the eminent Israeli journalist Tom Segev, also explicitly rejected an argument now used by Israel to defend the legality of settlements, namely that the West Bank was not "normal" occupied territory because it had not indisputably belonged to another sovereign national power and had been unilaterally annexed by Jordan.

Mr Meron said the international community would regard settlement as showing "intent to annex the West Bank", adding that "certain Israeli actions are inconsistent with the claim that the West Bank is not occupied territory". He pointed out that the government specifically decreed military courts had to apply the Geneva Conventions in the West Bank.

Israel has long argued that the policy of settlement conforms with the 1922 League of Nations decision at the San Remo conference in favour of Jewish settlement in Palestine. It also contests that the Fourth Geneva Convention's clear prohibition of transfers of civilian population to occupied lands was drafted to deal with forced population transfers in central and eastern Europe in the Second World War.

Yesterday, Mark Regev, the Foreign Ministry spokesman, said Israel did not accept that settlements properly decided by the government contravened international law. "We distinguish between illegal outposts, which will be demolished, and legal communities established according to the law." He said the original advice had not been upheld by decisions of the Israeli courts.

In yesterday's New York Times, Mr Gorenberg said: "Today it is clear that Israel's future as a Jewish state depends on ending its rule of the West Bank." He adds: "Thirty-eight years after the missed warning, we must find a way to untie the entanglement."