Peace Now - which tracks Jewish settlement activity - says 2.2bn shekels ($450m) from the 2001 budget were spent on settlements in the West Bank.

The policy of the Israeli Government is to try to increase the number of settlers... and to make their life and economy better than life in Israel Yariv Oppenheimer, Peace Now

More than 200,000 Israelis live in communities in Palestinian territories in the West Bank and Gaza. The settlements are illegal under international law.

However, the report was dismissed as "manipulative" by a group which represents settlers.

It came as a new opinion poll showed the right-wing Likud party of Israeli Prime Minister Ariel Sharon on course for victory in next Tuesday's general election.

'Political' aims

In its report, Peace Now said that the Israeli Government spent $1,500 more per capita on Jewish settlers than it spent on citizens living in Israel.

It says the money went on housing, roads, industrial development and income tax benefits.

Many Israelis favour a "security fence" with the West Bank

"The policy of the Israeli Government is to try to increase the number of settlers beyond the Green Line (Israel-West Bank border) and to make their life and economy better than life in Israel," Peace Now spokesman Yariv Oppenheimer said.

"It is a way to achieve a political goal."

Peace Now gave detailed information in its report but said the data was incomplete because funds had been scattered throughout the budget.

However, the Yesha settlers council told the Israeli daily newspaper Ha'aretz that the data had been altered "to serve the political purposes of those who ordered it".

It said those living in "confrontational settlements" were paying higher income tax and were being discriminated against.

Election looms

A survey in the Israeli daily Yediot Aharonot on Thursday showed Likud way ahead of the centre-left Labour Party.

The poll gave Likud 33 or 34 seats in the 120-seat parliament up from its current number of 19.

In contrast, Labour was heading for a crushing defeat with just 18 or 19 seats, down from 25.

The survey predicted that a Likud-led coalition, which included the ultra-Orthodox and far-right parties, could have 65 or 66 members with the left and centre having 55.