Shamir Plan for New Settlements Stalls Peace, U.S. Says : Israel: The criticism reflects anger over the premier’s balking at efforts for Mideast talks.

WASHINGTON —  The Bush Administration intensified its criticism of Israel’s caretaker government Monday, saying that Prime Minister Yitzhak Shamir seems determined to install additional roadblocks to the peace process before a new government can be formed.

“It’s disturbing that an Israeli leadership which was unable to move forward on peace seems ready to move forward on new settlements,” State Department spokeswoman Margaret Tutwiler said in response to reports that Shamir planned to begin work at once on five Jewish settlements in the West Bank and Gaza Strip.

Tutwiler said Washington has long regarded the settlements as “an obstacle to peace.”

“We look forward . . . to working with a new government that emerges soon that is capable of moving the peace process forward,” Tutwiler said.

The comment brought into the open some of the anger that Administration officials have privately directed at Shamir since the prime minister balked at a plan by Secretary of State James A. Baker III. The Baker plan called for starting a step-by-step process that ultimately would lead to peace talks between the Israeli government and representative Palestinians.

The Israeli Parliament brought down Shamir’s coalition government on a vote of no confidence last month. But under Israeli law, the prime minister and his right-wing Likud Party retain full powers until a new government can be formed. The process could take months.

Tutwiler’s statement, prepared in advance by senior Administration officials, seemed to be part of a growing debate that centers less on how to make the peace process work and more on how to apportion blame for its failure.

The dean of the Simon Wiesenthal Center in Los Angeles joined in the discussion by sending Baker copies of a Palestine Liberation Organization publication suggesting that the extermination of Jews by Nazi Germany never took place.

Rabbi Marvin Hier said the PLO, despite decades of anti-Israel rhetoric, had never previously questioned the historical record of the Holocaust. He said the publication, operated by PLO Chairman Yasser Arafat’s mainline Fatah organization, demonstrates that a belief in PLO moderation “is a figment of people’s imagination.”

“This puts them beyond the pale of moderation that they have been trying to foster for the last year,” Hier added in a telephone interview from Los Angeles.

A State Department official said the Administration would not comment on Hier’s letter until the full text of the Arabic language article could be studied. In a report filed earlier this month, the department discounted the often inflammatory anti-Israel statements attributed to some PLO affiliates because “the PLO is a heterogeneous organization in which constituent groups and individuals often express opinions differing from the consensus of the PLO as an organization.”

Hier said a two-part series on the Holocaust was printed Dec. 13 and Dec. 20 in Istiqial (Independence), a weekly magazine published by the PLO in Nicosia, Cyprus.

A forward by the magazine’s editor said the series was intended “to expose the forgery of Western propaganda which is based on distortion of facts,” according to an English translation provided by Hier.

“The burning of the Jews in the Nazi chambers is the lie of the 20th Century,” the article added. “Nazi camps were more civilized than Israeli prisons. Jews are complaining of their treatment by the Gestapo, whereas the truth is that they were served healthy food.”

Anti-Semitic groups in Europe and the United States have tried for years to discredit the Holocaust.

The State Department’s latest criticism of Shamir was prompted by a statement Sunday by a Shamir aide, Yossi Ahimier, that the caretaker government planned to go ahead as soon as possible with five new settlements. They had been previously postponed by former Defense Minister Yitzhak Rabin in response to U.S. protests.

Rabin, a member of the centrist Labor Party, was dropped from the government before Shamir established his caretaker regime.