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The long-stalled project near Jerusalem, known as E1, further fragments West Bank lands envisioned as part of a Palestinian state, advancing a goal of Israeli hard-liners.
Aug. 20, 2025Updated 5:09 p.m. ET
Israel gave final approval on Wednesday to a settlement project in the heart of the occupied West Bank that supporters and critics alike say will deal a major blow to the contiguity of territory that Palestinians hope will be part of a future independent state.
The project, known as E1, was delayed for more than two decades, often following pressure by the United States. But the Trump administration has been far less critical of settlements than previous administrations, or most of the international community, which generally considers them to be illegal and obstacles to Israeli-Palestinian peace.
Roughly 500,000 Israeli settlers and about 3 million Palestinians live in the West Bank, where the Israeli military holds overriding control. Israeli troops regularly raid Palestinian cities and restrict the movement of Palestinians. While Israeli settlers who live in the West Bank can vote in Israeli elections, their Palestinian neighbors have no say in them.
Under the plan, around 3,400 additional settlement housing units would be built on one of the most sensitive tracts of real estate in the West Bank: E1, short for East One. The plot lies just east of Jerusalem, which both Israelis and Palestinians consider their capital.
Prospects for a functional Palestinian state have been dim for years, becoming more so with each new Israeli settlement, road or barrier, and it has never been clear what its boundaries would be.
But human rights groups and European countries say building the E1 settlements there would increasingly bisect the central West Bank, making the possibility of a future Palestinian state there even more tenuous. They argue it would also hem in mainly Palestinian neighborhoods of East Jerusalem, preventing them from growing into the West Bank.
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“This could have disastrous consequences for Palestinian contiguity and really could call into question the feasibility of a Palestinian state,” said Alon Cohen-Lifshitz, an urban planning expert at the Israeli human rights group Bimkom.
Building settlements there could also put hundreds of Palestinians who live in and around the area at risk of expulsion, he added.
The Palestinian Authority, which administers some parts of the West Bank, denounced the project as a “dangerous escalation.”
European countries, including some of Israel’s traditional allies, have denounced the E1 settlements. The Israeli government is already facing international fury over its conduct of the war against Hamas in Gaza, where tens of thousands have been killed.
“If implemented, it would divide a Palestinian state in two, mark a flagrant breach of international law and critically undermine the two-state solution,” said David Lammy, the British foreign secretary. “The Israeli government must reverse this decision.”
But for Israeli hard-liners, undermining prospects for an independent Palestinian state is precisely the point. Prime Minister Benjamin Netanyahu of Israel and his allies have rejected ending the occupation and establishing an independent Palestinian state, arguing that it would be a boon to Hamas.
Bezalel Smotrich, the finance minister, declared the E1 project’s approval was another step toward ensuring that the idea of a Palestinian state “is being erased from the table.”
“Every town, every neighborhood, every housing unit is another nail in the coffin of this dangerous idea,” he said on Wednesday.
As part of an agreement with Mr. Netanyahu, whose coalition needs Mr. Smotrich’s party to control a majority in the Parliament, Mr. Smotrich was given wide-ranging power over West Bank settlement construction.
As the international community has focused on the devastating war in Gaza, the Israeli government has barreled ahead with settlement construction in the occupied West Bank.
The Israeli authorities had advanced plans for more than 19,000 housing units as of late July, the highest tally in years, according to Peace Now, an Israeli settlement watchdog. Galvanized by Mr. Smotrich, the government has worked to establish new settlements and retroactively approve outposts illegally erected by Jewish radicals without permits.
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That has been accompanied by a campaign of brazen, sometimes deadly attacks by Jewish extremists on Palestinian communities.
“This government is trying to exploit every minute in power to create facts on the ground which will prevent a Palestinian state,” said Hagit Ofran, a researcher at Peace Now.
For roughly two decades, the E1 plans wound their way through the bureaucratic Israeli zoning process in the West Bank. But intense international opposition, including from the Obama and Biden administrations, mostly kept the project dormant.
But suddenly, earlier this summer, the Israeli government jump-started the proposal, said Mr. Cohen-Lifshitz, and rights groups had almost no time to file objections.
Within about a month, the Israeli authorities called a hearing for final objections to the E1 project before announcing that they would approve it.
Asked for the administration’s stance on the E1 project this week, Mike Huckabee, the U.S. ambassador to Israel, said that it was up to the Israeli government to decide.
“Whether or not there should be a massive development in E1 is a decision for the government of Israel to make, and so we would not try to evaluate the good or the bad of that,” Mr. Huckabee said in a radio interview.
Last week, Mr. Smotrich appeared to tie the decision to a recent diplomatic push by France, the United Kingdom and other countries to recognize an independent Palestinian state.
“Today, whoever tries abroad to recognize a Palestinian state — will receive our answer on the ground,” Mr. Smotrich said.
Aaron Boxerman is a Times reporter covering Israel and Gaza. He is based in Jerusalem.
