Israel's Lieberman says won't "choke" settlements

By Allyn Fisher-Ilan

SHEFARAM, Israel (Reuters) - Israeli Foreign Minister Avigdor Lieberman during a rare visit to an Israeli-Arab town on Thursday assailed a U.S.-led campaign to stop settlement building, calling it "disproportionate".

Lieberman took a tougher tone than others in Israel's right-wing government in response to Washington's demands to stop building in West Bank land seized in a 1967 war.

The ultranationalist cited world concerns about North Korea's latest missile tests and a disputed election in Iran, a country accused of developing a nuclear programme for military purposes, though Tehran says it to generate electricity.

"Have matters not become disproportionate?," Lieberman said. I think we should put things back in perspective."

"We cannot agree to choke these same people with our own hands by not allowing them simply normal life as everywhere else," Lieberman said of the settlers, who number about 500,000 in a territory that also is home to 3 million Palestinians.

Lieberman, who is a settler, also took issue with German Chancellor Angela Merkel's remarks on Thursday to the Bundestag that "there must be a stop" to settlement building.

Washington's calls for a total halt to settlement building in land Palestinians seek for a state has opened the most serious rift in U.S.-Israeli relations in a decade.

Palestinian President Mahmoud Abbas also insists on a settlement freeze before peace talks can resume.