DAHARIYA, West Bank (AP) _ It's not hard to get a sense of the leading industry in this desolate Palestinian hill town.

On a long stony slope below a cluster of concrete houses, more than 1,000 cars lie strewn in haphazard heaps, the carcasses picked clean. Not an antenna, not a rubber floor mat, not a door handle remains.

The blighted valley, in the biblical hills outside the Palestinian city of Hebron, is the end of the road for some of the tens of thousands of cars stolen in Israel each year.

Car theft is soaring in Israel, with a projected rise of 25 percent this year to 45,000 cases. Israel's national police say many of those cars end up in the chop shops of the West Bank or on the rutted roadways of the Gaza Strip.

Auto theft has become a familiar type of Israeli-Palestinian quarrel, a bitter brew of politics and prejudice, accusation and rebuttal, half-truths and outright lies.

The rancor undermines what little trust exists and raises the question of whether the two sides can learn to live as neighbors. The issue even came up during the latest round of peace talks, with Israel calling on the Palestinians to rein in car thieves.

Israelis are irate over car-insurance costs that have risen along with the theft rate and resent what they see as lax law enforcement by Yasser Arafat's Palestinian Authority.

And they are infuriated by some top Palestinian officials' procurement of stolen vehicles, usually luxury models. Recent cases included a Palestinian lawmaker picked up in a stolen Mercedes and a general's chauffeur driving a stolen BMW.

Palestinian officials say they are being made into scapegoats. They claim Israelis are active participants in the car-theft trade, either selling stolen cars to Palestinian middlemen or pulling insurance scams by handing over the keys, reporting their cars stolen and trading up to a new model with the insurance payment.

At the main city jail last week in Hebron _ which with surrounding villages is considered the West Bank's car-theft capital _ Palestinian officials paraded accused auto thieves to recite tales of partnership with Israelis.

One confessed thief leaned toward a journalist. ``Just tell me what model you want _ I can make a call to Israel and get it in half an hour,'' he said.

Whether a stolen car stays in one piece depends on where it's taken. Israeli vehicles brought to the West Bank, with its patchwork of Israeli and Palestinian control, most often are dismantled and sold for parts, because Israeli patrols keep an eye out for stolen cars.

But in the autonomous Gaza Strip, out of the reach of Israeli law, the presence of stolen cars is so routine that they are issued special license plates and driven openly even by Palestinian police.

Just how differently the two sides view the problem is illustrated by the case of the rabbi's white Mercedes.

Earlier this month, thieves made off with a spanking-new model belonging to Rabbi Ovadia Yosef, the ultra-Orthodox spiritual leader of Israel's powerful Shas political party. Within 24 hours, Palestinian police had recovered the car in the Arab village of Beit Omar outside Hebron.

Palestinian police said the case showed they are ready and willing to crack down on car thieves when Israeli authorities provide help _ in this case, use of a tracking device in the car.

The Israelis, however, suggested Palestinian police know where to look for stolen cars anyway, because they are in cahoots with the thieves.

``It shows only one thing _ that the Palestinian Authority, if they want, can find these stolen cars,'' Cabinet secretary Danny Naveh said on Israel radio. ``... Israeli police are interested in stopping this, but they can't while the cat is guarding the cream.''

Palestinian officials, in turn, accuse the Israelis of helping auto thieves become entrenched in the first place. Tariq Zeid, the Palestinian police commander in Hebron, said that during the Israeli occupation, the Shin Bet security agency gave car thieves a free hand in order to cultivate them as collaborators and informants.

``We'd like to see the Israeli authorities take their responsibility, because it's a big one,'' Zeid said.

The Palestinians claim they are cracking down as best they can. Zeid said in the past six weeks, more than 135 businesses that traffic in stolen parts have been shut down in and around Hebron.

``I used to do construction work _ maybe I'll have to go back to that,'' lamented one stolen-parts dealer, who said police locked his shop and confiscated his stock. Only an unwieldy pile of rusted axles remained.

Other shut-down chop shops simply operate under the table. At one big stolen-parts warehouse in Hebron, the owners sat drinking strong Arabic coffee and complaining they had been put out of business.

Meanwhile, workers bustled about as usual with grease-stained parts, ready to sell them to customers waiting out back.