Israel is developing plans to build thousands of new housing units in the occupied West Bank, in a move that would “permanently bury the idea of a Palestinian state”, Israeli Finance Minister Bezalel Smotrich has said.
The E1 settlement project, which seeks to connect Jerusalem to the settlement of Maale Adumim and essentially split the West Bank in two, would effectively make it impossible to create a future Palestinian capital in East Jerusalem.
The announcement comes as an increasing number of countries, including the UK, France and Canada, are announcing they would recognise a Palestinian state from September.
Smotrich presented the advances in the project as Israel’s response to those announcements.
The project has been in the works for two decades, but progress has been frozen due to strong international opposition.
Smitroch announced on Thursday that approval for 3,401 new houses was currently pending, with final approval expected next week.

He was speaking at press conference held at a planned construction site.
“They will talk about a Palestinian dream, and we will continue to build a Jewish reality,” Smotrich said.
“This reality is what will permanently bury the idea of a Palestinian state, because there is nothing to recognise and no one to recognise.”
He has repeatedly lobbied Israeli Prime Minister Benjamin Netanyahu to annex the occupied West Bank and apply Israeli sovereignty to the entire territory.
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Palestinian officials were quick to criticise the plans.
In a statement, the presidency of the Palestinian National Council described them as a “systemic plan to steal land, Judaize it, and impose biblical and Talmudic facts on the conflict”.
Palestinian Speaker Rawhi Fattouh said the “colonial plan falls within the policy of creeping annexation” of the West Bank, which is accompanied by settler violence against Palestinians.
Israeli settlement watchdog Peace Now described the E1 plan as “deadly for the future of Israel and for any chance of achieving a peaceful two-state solution”.
All petitions to stop the construction were rejected by the planning committee on August 6.
Palestinians in the West Bank
Israel’s plans for construction in the West Bank are contributing to increasingly difficult circumstances for Palestinians living in the West Bank as much of the focus is instead on Gaza, around 40 kilometres away from the occupied territory.
Attacks on Palestinians in the West Bank have increased since October 7, 2023, while evictions from towns and an increased number of checkpoints have made life harder for those living there.
More than 700,000 Israelis now live in the occupied West Bank and east Jerusalem, territories captured by Israel in 1967 and sought by the Palestinians for a future state.
Would this be legal?
Israeli settlements in the West Bank are considered illegal under international law.
But during the first Trump administration, the State Department reversed longstanding US policy and ruled settlements were “not inconsistent” with international law.
The Biden administration left this new policy in place.
Could other countries take in displaced Palestinians?
Prime Minister Netanyahu has said there are talks underway with a number of countries about taking in Palestinians displaced by the war in Gaza.
South Sudan, Somaliland, Ethiopia, Libya and Indonesia are all involved in those talks, according to a senior Israeli official who spoke to ITV News’ American partner CNN.
In exchange for taking in some of Gaza’s population of more than two million people, the official said the countries are looking for “significant financial and international compensation”.
But the countries have not individually confirmed what part they could play.
On Wednesday, South Sudan rejected a report that it was in discussions about the resettlement of Palestinians, saying in a statement the reports were “baseless and do not reflect the official position” of the country. Somaliland also said there were no such talks earlier in the year.
Last week Indonesia said it was ready to take in 2,000 Palestinians from Gaza for treatment but that they would return to Gaza once they recovered.
Netanyahu has never given a detailed vision of what will happen to Gaza after the war but has repeatedly advocated for resettling displaced Palestinians in other countries, particularly after President Donald Trump floated the idea in January.
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