Israel has frozen the construction of the West Bank separation fence near the Gush Etzion settlement bloc over budget concerns, Army Radio said on Wednesday, adding that Defense Ministry documents showed construction could resume in late 2012.

According to a Defense Ministry document quoted in the Army Radio report, the defense establishment "realizes the importance of erecting the fence and retains all of the claims to its construction despite a lack of funding."

The cost of completing the said section is estimated at around NIS 5 billion.

In response to the Army Radio report, a spokesman for Defense Minister Ehud Barak said that "the construction of the fence continues and will continue," adding that the project was "complex, from both a judicial and an engineering point of view."

According to Army Radio, the 40-kilometer separation fence section discussed in the document is the same section the construction of which is pending over several Supreme Court petitions questioning the legality of the fence's location.

Earlier this year, security officials estimated that a terror cell may have successfully infiltrated into Israel through a gap in the separation fence in the Hebron Hills, the result of a lingering delay in the construction of a section in the area that would protect the Gush Etzion settlement bloc.

The existing gap in the fence's route extends for about 12 kilometers, from southern Jerusalem to the village of Jaba, south of the Gush Etzion settlement bloc.

The delay in building the fence in this area apparently stems from a petition to the High Court of Justice. But Shaul Arieli, an expert on the fence from the Council for Peace and Security, claims that were the state determined to build the fence in this area, it could do so without any problem.

Two fences are actually slated for construction in the area, essentially to surround Gush Etzion on both sides. But such a fence would also pen in 30,000 Palestinians, who therefore lodged the High Court petition.

The court's last hearing on the issue was held in 2006. In late 2010, Supreme Court President Dorit Beinisch asked the state whether it still intends to build a fence in the area, but the state has yet to respond to this inquiry.

Instead, the State Prosecutor's Office has repeatedly asked the court to extend its deadline for doing so. As things stand, the state is supposed to supply its answer next week.

Jerusalem District Police Chief Aharon Franco said Wednesday that in recent years, the police and the Israel Defense Forces have had to devote a lot of resources to dealing with problems created by the gap in the fence.