TEL AVIV, January 8, 2008 (WAFA) - The Israeli Government has told a court it does not want to reveal the true extent of settlement in the occupied Palestinian territories because the information would damage its image abroad, a local newspaper has reported.

Last week US President George Bush said Israeli settlement building in the West Bank was an obstacle to peace.

According to the Israeli newspaper Haaretz, the Israeli Defence Ministry, which rules the Palestinian territories seized by Israel in 1967, is resisting a petition from two Israeli rights groups for publication of an official report showing that the extent of settlement is greater than Israel has previously admitted.

Last week the Government asked the Israeli High Court to ban the publication of the report "for fear of harming state security and foreign relations".

According to one of the two petitioners, Peace Now, Israel has built 122 settlements in the West Bank with official state sanction. Another 100 newer settlements, described as "outposts" of older settlements following Israel's commitment not to build new settlements, were built without state sanction.

An officially commissioned report by attorney Talia Sasson found in 2005 that many of these were built with funding and assistance from government bodies, often in contravention of Israeli law.

The International Court of Justice and much of the international community regard all Israeli settlement in the occupied territories as illegal, citing provisions in the Geneva Convention that forbid the forced transfer of populations into lands seized in war.

According to Peace Now, the number of settlers living in the West Bank excluding East Jerusalem has almost trebled, to 270,000, since Israel signed the Oslo peace accords in 1993.

Another 180,000 Israelis live in parts of the West Bank annexed by Israel as part of its Jerusalem municipality, which is not recognised by the international community.

Bush's attempt to revive Israeli-Palestinian peace talks at Annapolis two months ago is already faltering in the face of Israel's subsequent decision to build hundreds of homes for settlers in occupied East Jerusalem.