TEL AVIV, (Reuters) - Israeli far-right Finance Minister Bezalel Smotrich has approved plans for a settlement that would split East Jerusalem from the occupied West Bank, a move his office said would bury the idea of a Palestinian state.
It was not immediately clear if Prime Minister Benjamin Netanyahu backed the plan to revive the long-frozen E1 scheme, which Palestinians and world powers have said would effectively lop the West Bank in two and will likely draw international ire.
In a statement headlined "Burying the idea of a Palestinian state," Smotrich's spokesperson announced the decision and said the development would build 3,401 houses for Israeli settlers between an existing settlement in the West Bank and Jerusalem.
Israel had frozen construction plans there since 2012 because of objections from the United States, European allies and other world powers who considered the project a threat to any future peace deal with the Palestinians.
Palestinians fear the settlement building in the West Bank - which has sharply intensified since the 2023 Hamas attack on Israel that led to the Gaza war - will rob them of any chance to build a state of their own in the area.
Settler violence has skyrocketed, from the destruction of olive groves and cutting water and electricity in communities like Susiya, to incendiary attacks on Christian holy sites.
There was no immediate statement from Netanyahu or the broader government. Smotrich's popularity has fallen in recent months with polls showing his party would not win a single seat if parliamentary elections were held today.
The Palestinian foreign ministry called the new settlement plan an extension of crimes of genocide, displacement and annexation, and an echo of Netanyahu's statements regarding what he called 'Greater Israel'. Israel has long rejected accusations of genocide and rights abuses and said it is acting in its own defence.
The E1 project would connect the Maale Adumim settlement in the West Bank with Jerusalem. Most of the international community views Israeli settlements in the West Bank, and its military occupation over the region since 1967, as illegal.
Peace Now, which tracks settlement activity in the West Bank, said that the housing ministry had approved the construction of 3,300 homes in Maale Adumim.
“The E1 plan is deadly for the future of Israel and for any chance of achieving a peaceful two-state solution. We are standing at the edge of an abyss, and the government is driving us forward at full speed," Peace Now said in a statement.
HOUSE BUILDING 'IN A YEAR'
Peace Now said there were still steps needed before construction, including the approval of Israel's High Planning Council. But if all went through, infrastructure work could begin within a few months, and house building in about a year.
Palestinians were already demoralised by the Israeli military campaign which has killed more than 61,000 people in Gaza, according to local health authorities, and fear Netanyahu will ultimately push them out of that territory.
President Donald Trump added to their anxiety by proposing the United States will take over Gaza, build an international beach resort and displace its residents to countries such as Egypt and Jordan.
About 700,000 Israeli settlers live among 2.7 million Palestinians in the West Bank and East Jerusalem. Israel annexed East Jerusalem in a move not recognised by most countries but has not formally extended sovereignty over the West Bank.
The UN and most world powers say settlement expansion has eroded the viability of a two-state solution by fragmenting Palestinian territory.
Israel disputes this, citing historical and biblical ties to the area, which it calls Judea and Samaria, and says the settlements provide strategic depth and security.
Most of the international community considers all settlements illegal under international law, a position backed by numerous UN Security Council resolutions, including one that called on Israel to halt all settlement activity.
Israel rejects this interpretation, saying the West Bank is "disputed" rather than 'occupied' territory.
Britain, Canada, Australia and New Zealand imposed sanctions in June on Smotrich and another far-right minister who advocates for settlement expansion, accusing both of them of repeatedly inciting violence against Palestinians in the West Bank
Britain and other states have said that Israel must stop expanding settlements in the West Bank. Over the past 22 months, as Israel has waged war in Gaza, rights groups have said settler attacks and settlement expansion in the West Bank have risen sharply.
(Reporting by Alexander Cornwell; Editing by Andrew Heavens)
