Israel on Wednesday gave final approval to a long-planned settlement project in the occupied West Bank’s E1 area, a move Palestinians and rights groups say could block hopes for a future Palestinian state. The E1 tract, east of Jerusalem, has been under discussion for over two decades but was previously frozen under U.S. pressure. The international community considers West Bank settlements illegal and an obstacle to peace.

Far-right Finance Minister Bezalel Smotrich, a former settler leader, framed the approval as a message to Western nations announcing plans to recognize a Palestinian state. “Every settlement, every neighborhood, every housing unit is another nail in the coffin of this dangerous idea,” he said.

Prime Minister Benjamin Netanyahu opposes a Palestinian state alongside Israel and has pledged to maintain open-ended control over the West Bank, east Jerusalem, and Gaza — territories Israel captured in 1967. Settlement expansion has coincided with heightened settler attacks on Palestinians, evictions, military operations, and movement restrictions, alongside some Palestinian attacks on Israelis.

E1’s location is critical, linking the West Bank cities of Ramallah and Bethlehem. Currently, Palestinians must take long detours through checkpoints, but the area could serve as a direct link in a future Palestinian state. Peace Now said the settlement aims solely to sabotage political solutions.

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Plans call for around 3,500 homes in E1 next to Maale Adumim, with construction potentially starting within a year. Approval also includes 350 homes for the Ashael settlement near Hebron. While Israel could theoretically remove the settlements in the future, strong government and public support make that unlikely.

The project is backed by religious and ultranationalist politicians, with Smotrich wielding Cabinet-level authority over settlements and promising to double the West Bank settler population.