Home west asia Gaza Israeli Finance Minister Smotrich Unveils Settlement Plan Aimed At Undermining Palestinian Statehood

Israeli Finance Minister Smotrich Unveils Settlement Plan Aimed At Undermining Palestinian Statehood

Smotrich, a settler himself, said Prime Minister Benjamin Netanyahu and U.S. President Donald Trump had agreed to the revival of the E1 development, though there was no immediate confirmation from either.
West Bank plan
Israeli Finance Minister Bezalel Smotrich and a woman hold a map that shows the long-frozen E1 settlement scheme, that would split East Jerusalem from the occupied West Bank, on the day of a press conference near the Israeli settlement of Maale Adumim, in the Israeli-occupied West Bank, August 14, 2025. REUTERS/Ronen Zvulu

Israeli far-right Finance Minister Bezalel Smotrich said work is beginning on a long-delayed settlement project that would split the West Bank and sever its connection to East Jerusalem. According to his office, the plan is intended to eliminate any future possibility of establishing a Palestinian state.

The Palestinian government, allies and campaign groups condemned the scheme, calling it illegal and saying the fragmentation of territory would rip up peace plans for the region.

Standing at the site of the planned settlement in Maale Adumim on Thursday, Smotrich, a settler himself, said Prime Minister Benjamin Netanyahu and U.S. President Donald Trump had agreed to the revival of the E1 development, though there was no immediate confirmation from either.

“Whoever in the world is trying to recognise a Palestinian state today will receive our answer on the ground. Not with documents nor with decisions or statements, but with facts. Facts of houses, facts of neighbourhoods,” Smotrich said.

Israel froze construction plans at Maale Adumim in 2012, and again after a revival in 2020, because of objections from the U.S., European allies and other powers who considered the project a threat to any future peace deal with the Palestinians.

Blow To Palestinian State Recognition Plan

Restarting the project could further isolate Israel, which has watched some of its Western allies condemn its military offensive in Gaza and announce they may recognise a Palestinian state.

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.

In a statement headlined “Burying the idea of a Palestinian state,” Smotrich’s spokesperson said the minister had approved the plan to build 3,401 houses for Israeli settlers between an existing settlement in the West Bank and Jerusalem.

In Maale Adumim, Smotrich said the plan would go into effect on Wednesday.

Breaking the Silence, an Israeli rights group established by former Israeli soldiers, said what it called a land grab “will not only further fragment the Palestinian territory, but will further entrench apartheid”.

Nabil Abu Rudeineh, the Palestinian president’s spokesperson, called on the United States to pressure Israel to stop settlement building.

“The EU rejects any territorial change that is not part of a political agreement between involved parties. So annexation of territory is illegal under international law,” European Commission spokesperson Anitta Hipper said.

Norwegian Foreign Minister Espen Barth Eide said the move by Smotrich, an ultra-nationalist in the ruling right-wing coalition who has long advocated for Israeli sovereignty over the West Bank, showed that Israel “seeks to appropriate land owned by Palestinians in order to prevent a two-state solution”.

House Building ‘In A Year’

Peace Now, which tracks settlement activity in the West Bank, said there were still steps needed before construction. But if all went through, infrastructure work could begin within a few months, and house building in about a year.

“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.

Consecutive Israeli governments have initiated, approved, planned and funded settlements, according to Israeli rights group Yesh Din.

Some settlers moved to the West Bank for religious or ideological reasons, while others were drawn by lower housing costs and government incentives. They include American and European dual-citizens.

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 Israel will ultimately push them out of that territory.

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. The two-state plan envisages a Palestinian state in East Jerusalem, the West Bank and Gaza, existing side by side with Israel.

Israel cites historical and biblical ties to the area and says the settlements provide strategic depth and security.

(With inputs from Reuters)