JERUSALEM (Reuters) - Israel approved new measures on Sunday against Jewish ultranationalists who vandalise Palestinian property in a drive to mire security forces in sectarian violence in the occupied West Bank. Saying they sought to avenge attacks on Jewish settlers, the vandals have torched and spray-painted Palestinian mosques and cars and chopped olive trees in so-called "Price Tag" raids. Churches and Arab property inside Israel have also been hit.

Israel and the Palestinian Authority decided to resume economic cooperation suspended by the Jewish state last year, at a meeting of their finance ministers on Sunday. The Israeli finance ministry, announcing the agreement as host of the Jerusalem talks, said newly appointed Palestinian minister Shukri Bishara met Israel's Yair Lapid, who took office in March. They discussed "the implementation of confidence-building measures", it said, and a timetable was laid down after the meeting to renew economic ties between Israel and the Palestinians.

The Israeli and Palestinian finance ministers were meeting on Sunday for talks aimed at resuming economic contacts suspended by Israel last year, both sides said. The meeting between newly-appointed Palestinian minister Shukri Bishara and Israel's Yair Lapid, who took office in March, was scheduled for 3.00 pm (1200 GMT), the Palestinian finance ministry said.

Israel is seeking approval for hundreds of settler homes in the northern West Bank, including retroactively legalising previously unlicensed housing in Itamar settlement, Israel media reported on Thursday. The Jerusalem Post said that plans to build 538 new homes in Itamar and legalise 137 existing units were submitted to regional planning authorities this week. scw/bpz