A vast detention complex is rising from the sandy grounds of Ktzi'ot prison in the Negev desert, close to Israel's border with Egypt, which will become the world's largest holding facility for asylum seekers and migrants.

When it is completed, at an initial cost of £58m to the Israeli government, it will be capable of holding up to 11,000 people.

Despite unprecedented protests at rising costs of living, and increased threats to national security in a volatile, post-Arab spring Middle East, immigration is of such paramount importance to Binyamin Netanyahu's coalition that it has skimmed a minimum of 2% from every ministry's budget to fund the construction and start-up costs of the building.

"We are a small country of 8 million. Last year we had more illegal immigrants than legal ones," said Mark Regev, the Israeli government's spokesman.

"We are currently the only first-world economy and the only democracy in the region. But for people coming from countries like Somalia and Sudan, we cannot be the solution."

Regev said the new detention centre, which should receive its first 3,000 detainees by the end of this year, was part of a multi-tiered strategy to tackle and deter economic migration. Other measures include a security fence that will run the length of Israel's southern border, aggressive implementation of employment laws and, ultimately, repatriation of the migrants.

In January, the Knesset passed a controversial bill categorising anyone attempting to enter the country through its southern border as an "infiltrator" who can be detained for three years – longer if they are from a "hostile state" such as Sudan.

"If we find any bona fide refugees, some will be able to stay and others will be sent to a third country that accepts refugees," said Regev.

Of the 13,683 people who entered Israel illegally in 2010, 62% were Eritreans and 33% were Sudanese. According to UNHCR figures, 66% of Eritreans who arrive illegally in the UK are granted refugee status and 96% of those arriving in Canada.

In 2010, Israel recognised three refugees, rising to six last year. In total, just 170 people claiming asylum have been granted refugee status by the Jewish state since it signed the refugee convention in 1949.

Mubarak, 18, arrived in 2009. He fled Darfur in western Sudan when the Janjaweed militia destroyed his village. The militiamen pursued families as they fled to nearby villages, looking for children to fight with them. His parents told him to run for his life.

He was 15 when he arrived in Israel and was held at a detention camp for women and children for 22 days, with up to 30 children in one small tent. He says the days in detention were the longest of his life.

"I didn't know what would happen to me. No one said when I was going to be let out. That was the worst thing, not knowing. When you aren't able to move, to go anywhere, you have too much time to think," he said. "It's not a good place to be. To think people would be staying there for three years, they would all be driven crazy. We are refugees. We aren't supposed to be in jail."

But Mubarak is not recognised as a refugee in Israel. Immigrants from Sudan and Eritrea are currently offered "group protection", which means they cannot be sent back to their home countries – but nor are they afforded any rights or state support.

Israel's ministry of defence says the new detention facility will have libraries, teachers, day care, basketball courts and several hairdressing salons.

Following pressure from human rights groups, the space allocated per person has been increased from 2.5 square metres to 4.9, including bathrooms. According to EU standards, the "desirable" size is 7 square metres. A high-ranking official involved with overseeing construction of the centre says: "It will be very comfortable. But at the end of the day, we are dealing with people who have entered Israel illegally. I am not making them a hotel – although it's not too far from one."

Amnesty Israel's position is that however much the conditions are improved, the prolonged detention of refugees is still illegal. "Detention should never be used as a deterrent. Asylum seekers should not be treated as criminals," it argues.

Oded Feller, a lawyer for the Association for Civil Rights in Israel, is among the activists opposed to the construction of the Ktzi'ot complex. Detention centres, he argues, are places where asylum applications are processed and people should be held only for a matter of months.

"It doesn't matter if they have places to learn and play, they will be held there," said Feller. "It will be a prison for people from Africa. The Israeli government is building a refugee camp, not a detention centre."

© Guardian News and Media 2012

Detention Center via RIRF Stock / Shutterstock