WADI SA'AWA, Israel — There's no street sign on the dirt road leading to Hassan al Finesh's corrugated tin shack in Israel's rolling southern desert, only a large concrete block with a spray-painted warning: "Danger — Firing Area. Entrance Forbidden."
Finesh and his extended Bedouin family didn't intend to live in the middle of the Israeli military's training grounds. The Israeli government came along a few years ago and transformed the unauthorized Bedouin community into a military training site.
Last month, Israeli officials returned with a new warning for Finesh and the 200 other Bedouin residents: Move, or we'll demolish your homes.
"Where shall I go?" asked Finesh, a dejected, 67-year-old father of nine who walks unsteadily with a hand-carved wooden cane. "Do they want me to go to heaven?"
Israeli leaders have a $3.6 billion plan to transform the vast Negev desert into prospering Jewish communities. Finesh and 80,000 other Bedouin say the land is theirs, however.
As Israel presses ahead with the development, a Human Rights Watch report released Monday concludes that it's using "discriminatory, exclusionary and punitive" policies to push the aside the Bedouin, who are descendants of Arab tribes that once roamed the Negev.
"Israeli policies have created a situation whereby tens of thousands of Bedouin citizens in the Negev have little or no alternative but to live in ramshackle villages and build illegally in order to meet their most basic shelter needs," the report says.
Since Israel was founded nearly 60 years ago, its leaders have been wrestling with what to do with its small Bedouin minority, now climbing above 160,000.
Israel has pushed about half the Bedouin into sterile, depressed new desert towns, demolished thousands of illegal shanties and transformed their sheep-grazing pastures into dangerous military zones.
About 80,000 Bedouin living in more than three dozen unauthorized shantytowns and villages refuse to move, even though they receive no electricity or water from Israel.
Israeli Prime Minister Ehud Olmert has set up a commission to come up with innovative ways to handle the holdouts.
"The government of Israel understands that it needs to solve the problem of the Bedouin," said Yehuda Bachar, the director general of a newly established government department for Bedouin affairs. "If it is not solved now, it will not be solved for many years."
The intent behind the plans is clear: Israeli leaders want to move the Arab residents to make way for Jewish developments.
The Israeli government is looking to spend $3.6 billion over the next seven years to lure more Jewish residents to the Negev, a triangular desert that makes up more than half of the nation's land.
"The only chance for the development of the Negev is that we bring more Jews," said Shmuel Rifman, the mayor of the local Ramat Negev Regional Council, who supports a trickle-down theory when it comes to the Bedouin.
"When there are more jobs for the Jews, there will be more jobs for them."
As with Israel's clash with the Palestinians, the battle with the Bedouin is over land.
Finesh was a young boy in what was then Palestine when Jewish militants beat back Arab armies in 1948 after Israel declared its independence.
Most Bedouin fled. Israeli leaders debated what to do about those who stayed. Ultimately, they relocated thousands of Bedouin, such as Finesh, to make way for new Jewish arrivals. The Bedouin, who accepted Israeli citizenship, set up villages that the government still refuses to sanction.
Because Israel doesn't recognize these communities, they receive no running water, no state electricity and no local services. Power lines serving Jewish towns run over Bedouin homes. A toxic waste site sits not far from one Bedouin community. Compared with Jewish settlers at illegal West Bank outposts that often receive basic power and security, the Bedouin get second-class treatment.
A few years ago, Finesh said, Israeli officials came and declared their homes a military firing zone. Israel set up concrete blocks along the narrow road with warnings in Hebrew and English but not Arabic.
Throughout the year, Israeli soldiers converge on the area to take part in disruptive military exercises in the surrounding hillsides.
The threat to raze homes, which came last month, is real. Last year, Israel demolished at least 225 homes, more than twice as many as in 2006, according to the Regional Council for Unrecognized Villages. At the moment, Israel has curtailed the demolitions while the Bedouin commission crafts new solutions.
Israel has tried various ways to eliminate the shantytowns, which have been dubbed "unrecognized villages."
It's offered to pay the Bedouin about $40,000 per acre to give up their land claims, a price that many consider too low for abandoning their historic family rights. Israel also has encouraged them to move to seven specially created towns that are among the country's poorest.
Meanwhile, it's established a kind of homesteading program that's encouraged Jewish farmers to move to the Negev. It offers them cheap land - with rents of as little as $3 an acre per year -- and good deals to set up ranches, wineries and farms.
That's led to long-standing rivalries between Bedouin families and Jewish farmers that sometimes have exploded into fatal confrontations.
Last year, a Jewish farmer in the Negev became a vigilante cult hero after he shot and killed a Bedouin trespasser on his land. Though Shai Dromi has been charged with manslaughter, he's been celebrated by Negev residents who want police to stop thieves who steal the farmer's sheep.
Negev farmers have slapped "We are all Shai Dromi" bumper stickers on their cars. The Israeli parliament is debating a law that would give citizens more protections when they fight off intruders.
Dromi's mother, Maya, is wary of government attempts to solve the problem.
"I used to be much more optimistic than I am today," said the 75-year-old, who lives with her son. "It's hard today because I feel there is so much mistrust that's built up over the years, and it puts a big question mark in my belief that if you sit down honestly you can come up with a real solution."
( McClatchy special correspondent Cliff Churgin contributed to this article from Jerusalem.)