Rav Amsalem from Shas has written a booklet, and received the approval and agreement from Rav Meir Mazuz, explaining why he believes it is allowed to remove the graves from the plot of Barzilai Hospital in Ashkelon and build the emergency room according to the original plans.

Rav Amsalem argues based on a number of points.

• The issue of the re-interment of grave sites - many governments have done this when there is a need to build a road or to nationalize the area of a cemetery, and the like, and it was done with the approval of rabbonim and gedolim (he quotes sources from the halacha seforim)
• Since the experts say these are definitely graves of non-Jews, as Ashkelon was always inhabited by non-Jews, usually Pagans, re-interment is allowed, as the non-Jews generally allow re-interment anyway.
• Adding to that is the saving of lives as what would be built is a hospital...
• Any changing of the plans will cause great delays, and a tremendous outlay of expenses, the graves are considered to be damaging to the public. When graves are damaging to the public, they are always allowed to be re-interred.
• The gedolim have written in the past not to cause great expense to the public, especially when the public cannot afford it, especially when we are not even talking about Jewish graves and at most it is only a possibility they are jewish graves, and it is more likely they are non-Jewish, and even for Jewish graves it is only rabbinically prohibited to move graves
• Therefore, causing such a great expense on the public is definitely considered damaging to the public, which should not be done. Especially as it is for a hospital.
  

Rav Mazuz in his approval, said that this is true, and the concern that the non-Jews will see Jews moving bodies and will learn to treat the dead without respect is unfounded, as everyone understands that Ashkelon has been coming under rocket fire and the situation is one of pikuach nefesh and the hospital is in dire need of this emergency room. Plus, the bones would be moved to Jerusalem [which is a situation that always allows the re-interment of bones].
(source: Kikar)

This issue is a big one. The voices are starting to make themselves heard..