Israeli finance minister approves controversial settlement plan, threatening two-state prospects
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Israeli Finance Minister Bezalel Smotrich has approved plans for a controversial settlement project that would separate East Jerusalem from the occupied West Bank - a move his office described as “burying the idea of a Palestinian state.”
The decision revives the long-stalled E1 plan, which aims to build 3,401 housing units for Israeli settlers between Jerusalem and the West Bank settlement of Maale Adumin.
Critics say the project would split the West Bank, isolate East Jerusalem — claimed by Palestinians as their future capital — and make the creation of a contiguous Palestinian state impossible.
It remains unclear whether Prime Minister Benjamin Netanyahu supports advancing the plan, which has been frozen since 2012 following strong objections from the United States, European allies, and other world powers. These countries have long warned that the project threatens the viability of any future peace agreement with the Palestinians.
Smotrich’s spokesperson announced he will hold a press conference on Thursday to discuss the settlement plans. His political standing has weakened in recent months, with polls suggesting his party could fail to win any seats if elections were held now.
According to settlement watchdog Peace Now, the housing ministry has approved construction for 3,300 homes in Maale Adumin.
“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,” the group warned. The organisation added that final approval from Israel’s High Planning Council is still required, but infrastructure work could start within months if the project proceeds.
Most of the international community considers Israeli settlements in the West Bank — and Israel’s military occupation there since 1967 — illegal under international law. Britain, Canada, Australia, and New Zealand imposed sanctions in June on Smotrich and another far-right minister for advocating settlement expansion and allegedly inciting violence against Palestinians.
Over the past 22 months, during Israel’s war in Gaza, rights groups have reported a sharp rise in both settler violence and settlement expansion in the West Bank.