...Rawabi, which means green hills, is a business venture by a Qatari firm, Diar Real Estate Investment Co., and West Bank-based Massar International. The U.S. government gave nearly $6 million dollars to plan a regional wastewater treatment facility, high-tech communications and street-paving.

The site was carefully chosen. It has no ancient religious relics for Jews and Arabs to quarrel over, and it lies in one of the Palestinian-administered areas of the West Bank where construction doesn't need Israel's permission.

Work crews broke ground on the site in January, to fanfare and predictions that the first residents could move in 2013.

Nine months later, bulldozers have carved some foundations and hillside roads, but little construction has taken place. Without the access road, builders say, the city isn't worth building.

The site now is reached by a a narrow, winding road through Palestinian villages, in parts too narrow for two lanes of traffic. But about three kilometers (two miles) of the access road being proposed would have to cross an Israeli-controlled zone.

The Palestinian Authority asked Israel last year for jurisdiction over the strip of land needed, and senior Palestinian officials say Israel has repeatedly assured them approval is imminent. Israeli defense officials say they expect the road to be approved, but don't know when. All the officials requested anonymity before discussing the negotiations.

Many on both sides expect Rawabi to emerge as a bargaining chip in peace talks — suggesting the issue could drag on for years and turn investors off the project...