| GEO World|
| Arabs challenge Israeli settlements with Jerusalem fund|
| Updated at: 0126 PST, Friday, March 26, 2010|
SIRTE: Arab foreign ministers on Thursday agreed to raise funds for Jerusalem Palestinians in a bid to counter Israel's settlement drive in the Holy City, at preparatory talks for a weekend summit.
Their decision will be submitted to Arab leaders for final ratification when they gather on Saturday and Sunday in the Libyan Mediterranean city of Sirte for their annual conference.
"Yes, they have agreed," Arab League chief Mussa told reporters when asked if the fund had been approved by the ministers.
The Palestinian Authority had asked for 500 million dollars (376 million euros) in Arab aid to help Jerusalem Palestinians cope as they are squeezed out by Israel's settlement drive.
The weekend summit is set to be dominated by the Middle East peace process after Israel infuriated Palestinian and Arab leaders by announcing earlier this month plans to build 1,600 new homes for Jewish settlers in east Jerusalem.
"We have asked for half a billion dollars," Palestinian foreign minister Riyad al-Malki told media earlier on Thursday.
"It is a modest amount compared to what Israel and the Jewish communities around the world spend on settlements in east Jerusalem and which amounts so far to more than 17.4 billion dollars," Malki added.