The government of Israel said Tuesday it had approved the building of a new neighborhood in the Jewish settlement of Kiryat Sefer in the Palestinian West Bank. It will comprise 1,806 housing units. In response, Palestinian President Yasser Arafat told a session of the Palestinian legislature, "What happened concerning continuous violations and crimes from this new Israeli leadership means they are declaring a state of war against the Palestinian people." In a separate incident enraged Palestinians marched in Jerusalem on Tuesday and staged a two-hour general strike following the destruction of a building which they said housed a community center. Israeli authorities had moved a bulldozer over the ancient wall of the old city and flattened the building in the middle of the night. "The Israelis are sending a very clear message to the Palestinians that we do not want peace with you," said Mr. Ahmad Qorai (Abu Alaa), speaker of the Palestinian Legislative Council. Shawgi Tell University at Buffalo Graduate School of Education [EMAIL PROTECTED]