'We are a suburb of Jerusalem, just a seven-minute drive away," says Michelle Baruch about the scenic hilltop community of Givat Ze'ev, where she has lived for the last six years. Baruch, an environmental consultant who immigrated from the United States shortly after September 11, 2001, describes the area as the "Galilee of Jerusalem." Gazing eastward at the Arab villages cascading down the steep peaks of the mountain range, or west towards the olive groves and sheep grazing in the green plains nourished by the winter rainfall, it's not difficult to understand why. Despite its proximity to the capital, the city seems far removed from the urban sprawl and incessant traffic of central Jerusalem, just a 25-minute bus ride away But if the place in question were just another suburb, last month's government announcement that a new 700-home neighborhood would be built to the west of the main settlement of Givat Ze'ev, which lies almost five kilometers over the Green Line on Route 436, would have passed by unnoticed. The development, known as Agan Ha'ayalot, was given the green light by Prime Minister Ehud Olmert despite a de-facto freeze on settlement construction in the wake of last November's Annapolis conference. The prime minister's spokesman, Mark Regev, said that Israel had been "very up front" that it had not committed to freezing construction in the large settlement blocs it intended to keep if it reached a peace deal with the Palestinians. Nevertheless, the announcement, like that to build in Har Homa, ignited a diplomatic storm and drew strong criticism from both the Palestinian Authority and the international community. Givat Ze'ev residents are also worried about the new development, albeit for entirely different reasons. Agan Ha'ayalot, designed as a neighborhood for haredim from outside the Givat Ze'ev bloc, will not serve the housing needs of current residents, who are experiencing rocketing property prices. It also threatens to upset the present sense of balance between the community's religious and secular residents. ASIDE FROM stunning views and a peaceful atmosphere, the lure of affordable housing has been one of the key incentives for the thousands of people who have come to live in Givat Ze'ev and its neighboring communities since its first inhabitants arrived a quarter century ago. "Anyone who came to Givat Ze'ev didn't come here necessarily for ideological reasons," believes Linda Katz, one of the settlement's first residents, who moved there in 1984. She says its popularity comes down to one thing: "It's cheap." Originally from St. Louis, Katz moved to Givat Ze'ev from the Psagot settlement, whose pink roofs overlook eastern Ramallah, because her in-laws were worried about the risks of living in such a settlement after her brother-in-law was killed in Lebanon. "There are lots of people from abroad here, they came because they didn't want to live in an apartment on the fourth floor," she says. "It's a very nice place to live for many reasons. It's quiet, reasonably priced and the mix of people here is amazing," says Baruch. She adds that Givat Ze'ev is a "great place to raise children," citing this as a key factor behind her decision to leave behind the noise and traffic of the central Jerusalem neighborhood of Rehavia, where she first lived upon arriving in Israel. Other places were dismissed for various reasons, including Mevaseret Zion ("not religious enough") and Modi'in ("there were no grass or trees there at the time"). She also nixed the Gush Etzion settlement bloc to avoid driving on the heavily fortified tunnel road in the West Bank. However, in the past year or so property prices have mushroomed. Demand for homes has outstretched new construction. Local real estate agent Motti Levi says that houses are available for purchase in Givat Ze'ev but prices have risen by around 30 percent in the last year alone. As a result, new buyers are facing difficulties in finding affordable properties in Givat Ze'ev, whether they are Jerusalem commuters, or the grown-up children of first-generation settlers who are getting married and seeking to raise their own families. "People are leaving Jerusalem for the periphery. Prices are also going up in Ma'aleh Adumim, but not as crazily as in Givat Ze'ev," notes Ram Kovorsky, secretary of the Givat Ze'ev Local Council. Kovorsky says that his son rents a three-room apartment on one of Givat Ze'ev's lower-scale streets which cost him $340 a month in 2007, compared to $320 the previous year. This year, his rent shot up to $600 a month. The same day apartments come up for rent, they are snapped up, says Baruch, an experience familiar to anyone searching for a place to live in Jerusalem or Tel Aviv. "Because there was very little construction here over the last decade for various reasons, Givat Ze'ev cannot even provide enough housing to keep up with the natural rate of population growth," she says. Local council engineer Yigal Shildkrot says that around 200 new apartments have been built in private projects over the last four years, although he considers this to be small in comparison to the size of the overall population. GIVAT ZE'EV was conceived by the government in 1981 and, like Pisgat Ze'ev, the town was named for Revisionist Zionist leader Ze'ev Jabotinsky. The main town of Givat Ze'ev itself is constructed along a U-shaped bend on a hilltop ridge that plunges into a deep wadi below, but the overall settlement bloc has a population of around 13,000, which incorporates three smaller satellite communities: Givon, Givon Hahadasha and Har Shmuel, close to the supposed site of the tomb of the Prophet Samuel. Each individual settlement is guarded by a checkpoint manned by a private security guard who casually lets traffic pass through a bright yellow gate. The first residents arrived in late 1983, including many young couples, immigrants from Western countries, as well as Israelis who work for the police or Egged bus company. Givat Ze'ev's distinctly middle-class feel makes the "quality of life" label a comfortable fit, although Baruch notes that there is a small "ideological" component in Givat Ze'ev. She explains that she was "neutral" in terms of choosing to live over the Green Line, although her husband considered it a plus point because he wanted to "build Israel." "Although the American media might think that we are settlers, the vast majority of people here don't think of themselves that way," she adds. But it's not just its residents' political persuasion that sets it apart from ideological religious settlements in the West Bank, such as Ofra, Psagot or Beit El, all located within a 15-minute drive away. "It has turned into a place with so many different types of people. There are Ashkenazim, Sephardim, religious, secular, Russian [olim]," observes Katz. "I feel sorry for people who live in a homogeneous place. One of the great things about making aliya is that I have really gotten to know Am Yisrael. We have the opportunity to meet so many people from different types of backgrounds." Baruch agrees that the mix of people is a bonus: "I didn't want to go somewhere where people are all the same. You really find a microcosm of Israeli society here," she says. Kovorsky agrees. "One of the most beautiful things here is that the religious and secular live together in harmony," he says. The settlement is also home to a community of 60 Karlin-Stolin hassidic families, including the rebbe himself, whom Kovorsky describes as "very special people." "The religious and secular people here respect each other," he says, noting that the hassidim participate in community life - including volunteering for security duty - and that secular residents don't drive on the streets of the small hassidic enclave on Shabbat out of respect. WHILE THE recent media furor over Agan Ha'ayalot has largely fallen on deaf ears in Givat Ze'ev, some fear that a new haredi neighborhood could unsettle the equilibrium among Givat Ze'ev's diverse populous. Residents are well aware that Agan Ha'ayalot itself is far from a "new" project. Initially authorized in 2000, it was originally intended as an upmarket secular neighborhood, but work that began on paving roads and other infrastructure was halted following the violence that came with the onset of the second intifada. On a road running west out of the main town, the yellow dust of a building site chiseled out of the barren hilltop rises around several high-rise apartment blocks well on their way to completion. Further down the winding path, a group of Arab laborers take cover from the midday sun in the shade cast by the row of large three-story buildings already erected in what will become Agan Ha'ayalot. In the past year or so, a haredi man who lives in Givat Ze'ev decided to sell them to the haredi community, where demand for housing is strong, and has been marketing them through the Nofei Yisrael company. "[Secular people] have more options, there is Har Homa, Modi'in or Ma'aleh Adumim. But there are fewer choices for haredim, so therefore there is more demand," says Zvi Kass, who works for Nofei Yisrael. Katz says that she knows secular residents who are worried about a haredi influx into the area. "I think that even without the new project, haredim will come because in Jerusalem the prices are so high," she says. People are speculating that Agan Ha'ayalot could become the "next Betar or Modi'in Illit," surmises Baruch. However, the new development is geographically separate from the main town of Givat Ze'ev, over three km. along a winding road, and will effectively become a new satellite settlement that will significantly expand the western border of the overall settlement bloc. "It's portrayed as part of Givat Ze'ev but it's far away enough to be separate. It's not really walking distance, because there is a steep climb to reach the [central] area," notes Baruch. Kass acknowledges that "sometimes people are afraid of haredim because of failures [to integrate with the existing population] in the past," although he believes that the distance of Agan Ha'ayalot from Givat Ze'ev proper will avoid friction. "They are very happy to have us here," he says. At press time, In Jerusalem had received no response from Givat Ze'ev Mayor Amos Tartman regarding whether a new haredi community will stretch the resources and services of the municipality. PEOPLE MIGHT be seeking places to live in Givat Ze'ev, but residents are leaving it in their droves each day to get to work. Apart from a small row of shops, Givat Ze'ev doesn't have an independent economy and Baruch says that the majority of the population can be seen emptying out each morning to commute to work in Jerusalem or Tel Aviv. Katz says that businesses don't take off in Givat Ze'ev and there is little in the way of commercial services apart from the small row of shops and food outlets on the settlement's "main drag," Rehov Hamaccabim, or those in the nearby Neveh Menahem neighborhood. Residents say many people do their shopping during their workday, typically in Jerusalem or Tel Aviv, which means that money they earn from outside the settlement is also spent outside. "Most people work outside, but they all pay municipal taxes. But taxes aren't enough [for the municipality] to function. We need to build employment and shops," observes Kovorsky, who says there is a plan to build a 300-dunam commercial zone for small businesses and shops on a nearby parking lot, as well as another site near the Mahaneh Ofer army base on the other side of Route 443. Kovorsky believes that Givat Ze'ev will benefit from the failure of the Safdie Plan, which sought to build 20,000 housing units and industrial space on green areas in western Jerusalem's hills. "Because the greens won, the population will move to the West Bank," he says. But Israel Kimhi, who leads research on Jerusalem at the Jerusalem Institute of Israel Studies, believes that there is no connection between the building at Givat Ze'ev and the collapse of the Safdie Plan. "The Safdie Plan was canceled, firstly, because there are still lots of places that can be built on within Jerusalem and they don't have to build around [the city] until these possibilities have been exhausted," says Kimhi. "Secondly, there are the green spaces around Jerusalem. People want to keep it like it is, both for people living in Jerusalem and across the whole of Israel." Kovorsky hopes that Givat Ze'ev will continue to grow and expand, "With the help of God," adding that it is slowly leaving behind economic problems including an NIS 27 million budget deficit four years ago which led the Interior Ministry to threaten to disband the local council. He says that a plan has been made with the Construction and Housing Ministry which would potentially double the population in the Givat Ze'ev bloc, but is skeptical whether, apart from building "here and there," the possibility of such large-scale construction will ever come to fruition. Construction and Housing Ministry spokesman Binyamin Weil confirmed that a plan has been approved which envisages a population target of 28,000 in Givat Ze'ev, incorporating between 6,000 and 7,000 new housing units in the first stage, rising to around 14,000 further in the future. Weil says that there is no timeline for executing the plan: "It depends on demand and all sorts of other questions," he says, although he does not expect it to happen in the near future since the political situation is currently "very volatile." Whether rising house prices alone are enough to justify instigating large-scale settlement expansion and the ensuing controversy remains to be seen, but, in the meantime, continued construction in dribs and drabs at Givat Ze'ev may not come as a surprise. "In those areas that Israel decided are essential to security or access to Jerusalem, it would be easier [to build] if there was an agreement [with the Palestinians]," believes Kimhi. "But meanwhile each side is doing its best to put facts on the ground."