Israel's decision to extend the municipal boundaries of Jerusalem is aimed at maintaining a Jewish majority in the city and consolidating control over surrounding West Bank land, analysts said Monday.

"The main motive is demographic. Expanding the area of the city will allow them to build new neighborhoods for Jews and increase the Jewish population," said Shlomo Hasson, a professor of geography at Jerusalem's Hebrew University.Officials said the plan, adopted by Prime Minister Benjamin Netanyahu's Cabinet on Sunday over U.S. objections, was drafted after a study showed Jerusalem's Arab community would grow to 45 percent of the city's population by 2020.

It calls for annexing land in Israel proper to Jerusalem and linking the holy city - which Israel calls its capital - with settlements in the West Bank under an "umbrella municipality."

The plan foresees a demographic mix of 70 percent Jews and 30 percent Arabs in the new municipality in 2020, according to published reports.

Palestinians now account for 180,000 of Jerusalem's 630,000 residents or about 29 percent, according to Israeli figures.

Nearly all of the Palestinians live in Arab East Jerusalem, which Israel captured in the 1967 Middle East war and later annexed as part of its "indivisible capital."

Palestinians, who want East Jerusalem to form the capital of their future state, say the scheme poses a new obstacle to the renewal of peace talks, stuck since March 1997.

Netanyahu denied on Sunday the plan violated interim peace deals with the Palestinians and said it was motivated mainly by economics through an expansion of the city's tax base.

Hasson said the initiative furthered Israel's "creeping annexation" of West Bank settlements near Jerusalem.

Israel has built a ring of Jewish settlements since 1967 on occupied land surrounding the city, the largest of which is Maaleh Adumim about three miles east of Jerusalem.

Israeli peace activist Udi Arnon said the expanded municipality would make it easier for authorities to link Maaleh Adumim to Jerusalem with a string of new neighborhoods.

"They've had this idea to link Maaleh Adumim with Jerusalem for a long time but the Defense Ministry has refused to approve it," Arnon, director of Jerusalem's leftist Ir Shalem group, told Reuters.

He said that if the municipality were given charge over such decisions, "you can bet the plan to link Jerusalem with Maaleh Adumim will go into effect."

Settlement construction in the West Bank is subject to the approval of military occupation authorities.