* Shepherds in Jordan Valley focus of demolition efforts
* Strategic area key issue in peace talks
* Rights groups slam Israel, which says dwellings illegal
By Allyn Fisher-Ilan
EIN EL HILWE, West Bank, March 12 (Reuters) - Palestinian shepherd Mahmoud Ka'abneh has squeezed his family of 12 into a neighbour's hut on a hilly desert oasis since an Israeli bulldozer turned his own flimsy dwelling into a pile of stones and twisted metal.
"They showed up at dawn and threatened to arrest me if I didn't vacate the house immediately. They wouldn't give me time to remove our personal belongings," Ka'abneh, 43, said.
Palestinian officials say Ka'abneh is one of more than 180 people uprooted since the beginning of the year by what they say is an upsurge in Israeli demolitions in the Jordan Valley, a hotly contested part of the occupied West Bank.
This increase comes against a backdrop of U.S.-brokered peace talks between the Israelis and the Palestinians, which remain stuck on various issues, including the fate of the sun-scorched valley, home to more than two dozen Jewish settlements.
Israel describes shepherds such as Ka'abneh as nomads and squatters. It says their ramshackle dwellings, built without permits and often located near Israeli military bases, are torn down in accordance with court orders.
International aid officials who help the Palestinians find themselves increasingly at loggerheads with Israel, and accuse it of violating international law that calls for an occupying power to ensure the welfare of the civilians it administers.
Last year, according to human rights groups, Israel demolished 663 Palestinian dwellings and farming structures, the highest number in five years. About 60 percent of the demolitions were carried out in the Jordan Valley.
The valley covers about a third of the West Bank and is home to some 10,000 Palestinians, among them 2,700 shepherds or Bedouin, the Israeli human rights group B'tselem says. An estimated 6,000 settlers live along the length of the valley.
Palestinians want the Jordan Valley to be the eastern border of the state they seek to establish in the West Bank, Gaza Strip and East Jerusalem, noting its breadbasket potential and easy access to Arab markets and underground water supplies.
Israel, which captured those areas in the 1967 Middle East war but quit the Gaza Strip in 2005, seeks in any peace deal a long-term security presence in the strategic valley abutting Jordan. The Palestinians have rejected this demand, saying they are only willing to see international troops stationed there.
It's a dispute that inflicts damage in particular on shepherds who count among the West Bank's poorest people, and who rely on the low-lying region's patches of greenery to graze their flocks of goat and sheep, to eke out a living.
"The shepherds want to feed their children, but Israel says, 'this is all ours,'" said Arif Daraghmeh, a Palestinian official and head of a regional council that includes the village where a dozen structures were destroyed in January.
"Israel is destroying our life in this area," he said.
Palestinians charge it is next to impossible to obtain an Israeli permit to build in any West Bank zones under Israeli administrative or security control.
Israel's military-run Civil Administration in the West Bank says it is working on 19 master plans to permit Palestinian construction in parts of the territory.
In the Jordan Valley, the International Commission for the Red Cross (ICRC), which had been providing tents to Palestinians whose homes had been destroyed, halted the supply in January, complaining of Israeli confiscations.
Israeli Foreign Ministry spokesman Yigal Palmor accused the ICRC of overstepping its authority and encouraging Palestinians to violate Israeli eviction orders.
"We are not dealing with purely humanitarian action but rather political action, which is way out of line," Palmor said.
A coalition of 25 aid groups in the West Bank said at least 65 aid items were confiscated by Israel last year. The Palestinian Authority, which exercises limited self-rule in the West Bank under a 1993 interim peace accord, has stepped in to provide tents to some homeless shepherds.
Near the spot where Ka'abneh's three shacks were razed in January on the hilly oasis village of Ein el Hilwe, neighbours speak bitterly of confrontations with the Israeli military.
Ahmed Mohammed Ismail, 75, said soldiers once confiscated his sheep when they wandered too close to a military base, and that last year, they destroyed one of his shacks.
His head covered by a classic Palestinian black and white checkered kuffiyeh, Ismail points at a steel pipe at his feet supplying water to a nearby Jewish settlement, one of several dozen built illegally, according to the West, in the valley.
"They have concrete homes. We aren't even allowed to pitch tents," he says of the fenced in Maskiot enclave, the closest settlement to the shepherd village of Ein el Hilwe.
Neill Kirrane, an official with the Swedish-based human rights group Diakonia, links Israel's demolitions in the Jordan Valley, with its goal of keeping the territory in the peace talks that resumed last July after a three-year deadlock.
"In reality the current talks are being used as a cover for increasing violations of international humanitarian law," Kirrane said in a statement to Reuters.
Palmor called such allegations "conspiracy crazed" and said the court-approved demolitions were aimed at preventing "nomads squatting on land that isn't theirs".
"It has nothing to do with political views about what should be done with the Jordan Valley," Palmor said. (Editing by Jeffrey Heller and Angus MacSwan)