Reliable Brokers
Online Investing
Alerts & Analysis
Easy Trading

Israel’s plan for massive new West Bank settlement would make a Palestinian State impossible

  • Plan includes 3,500 homes, cutting West Bank into two
  • Construction threatens viability of Palestinian State with East Jerusalem capital
Update : 22 Aug 2025, 09:00 AM

The Israeli government has approved a plan for construction of a massive new settlement bloc in the controversial E1 area in the occupied West Bank.

In reviving a project first proposed in 1994, which will comprise about 3,500 new dwellings in a line across the West Bank, finance minister Bezalel Smotrich laid bare the intentions of his government.

He declared that “approval of construction plans in E1 buries the idea of a Palestinian State, and continues the many steps we are taking on the ground as part of the de facto sovereignty plan.”

E1 (“East 1”) refers to 12 square kilometres of unsettled land east of Jerusalem. It sits inside the boundaries of the third most populous Israeli settlement in the West Bank, Ma’ale Adumim.

In 1975, Israel expropriated 30 square kilometres of land on which seven Palestinian villages had once stood.

Here they built Ma’ale Adumim, one of three Israeli settlement blocs that form an “outer ring” around the Israeli-defined municipal boundaries of Jerusalem.

Israeli authorities refer to these blocs as “facts on the ground.” They were initiated in the West Bank by the Israeli government after the 1967 War to ensure that Israeli population centres were protected from potential attacks.

Today, almost 40,000 Israelis live in Ma’ale Adumim – largely secular Israelis and diaspora Jews who have moved to Israel.

Far from the makeshift Israeli outposts that are scattered across the rural West Bank, Ma’ale Adumim was designated a city by Israel in 2015.

It is considered by the majority of Israeli Jews to be a permanently protected settlement bloc, which will be retained through land swaps in any final agreement with Palestinians.

The E1 development plan would involve a significant expansion of the existing settlement. All settlement building in East Jerusalem and the West Bank is deemed illegal under international law, but the E1 plans are particularly controversial.

At the heart of the controversy is the viability of a Palestinian State. Israeli construction in E1 would cut the West Bank into two separate parts, rendering it impossible to establish a contiguous Palestinian State with East Jerusalem as its capital.

Political threat

The plan to develop E1 was first proposed in 1994 by Israel’s then-prime minister, Yitzhak Rabin, to make sure Ma’ale Adumim was part of a “united Jerusalem.”

This was subsequently reaffirmed by Shimon Peres during his prime minister ship in 1996, as part of proposed territorial swaps in the framework of a permanent peace agreement.

In 2005, those plans were frozen after the US administration under George W. Bush told Israel that settlement in E1 would “contravene American policy.”

The plan was reignited by Israel’s current prime minister, Benjamin Netanyahu, in 2012, in retaliation for the United Nations’ extension of non-member status to Palestine. But it was then put on hold for eight years due to international pressure.

In 2020, a week ahead of the third national elections held in Israel in a single year, Netanyahu pledged to revive the E1 project, with the hope of securing votes and to court the ultra-nationalist parties into a potential coalition.

In 2022, Netanyahu renewed the E1 construction plans, weeks before then-US president Joe Biden was due to visit Israel.

Opposition and support

Each time the plans have been proposed, the decision to advance construction has been met with both internal and international condemnation.

On June 9 2023, the planning hearing was “indefinitely” postponed following a call between Netanyahu and Biden’s secretary of state, Antony Blinken.

In response to the most recent announcement to reinstate the plans, the European Union put out a statement expressing concern.

It urged Israel “to desist from taking this decision forward, noting its far-reaching implications and the need to consider action to protect the viability of the two-state solution.”

However, Donald Trump now appears to be breaking with the position of previous US administrations. It was recently reported in the Jerusalem Post that the Trump administration supports the reactivation of the development plans.

A spokesperson for the US State Department said “a stable West Bank keeps Israel secure and is in line with this administration’s goal to achieve peace in the region.”

Israel’s latest attempt to initiate construction in E1 shows that, while the plans have consistently been delayed, they have never been abandoned.

The answer is most likely that, with the international focus firmly on the continued assault on Gaza, the Israeli government believes it has the breathing space to press ahead with its commitment to building settlements across the West Bank.

Top Brokers