JERUSALEM – The Israeli government is moving forward with a highly contentious settlement construction project in a strategic area of the occupied West Bank, a decision that critics warn could effectively sever the territory and deliver a fatal blow to aspirations for a viable Palestinian state.

The announcement was made on Thursday by Israel’s far-right Finance Minister, Bezalel Smotrich, who confirmed that preliminary steps for construction in the sensitive corridor known as E1 are underway. The project has been frozen for years due to intense international pressure, particularly from the United States.

"We are advancing the construction in E1," Smotrich, a key figure in the settlement movement, told reporters during a tour of the area. "This is a strategic link for settlement continuity, and it will happen."

The plan involves the construction of thousands of housing units in the corridor connecting Jerusalem to the large Israeli settlement of Ma'ale Adumim. For decades, Palestinians and international observers have warned that building in E1 would create a continuous block of Israeli settlements, effectively cutting the West Bank in two. This would isolate East Jerusalem, which Palestinians seek as their future capital, from Palestinian urban centers in the south, such as Bethlehem and Hebron.

A 'Doomsday' for the Two-State Solution

Palestinian leaders reacted with swift condemnation, describing the move as a flagrant violation of international law and a deliberate effort to sabotage any chance of a peaceful resolution to the conflict.

"This is not just another settlement. This is the doomsday settlement," said Saeb Erekat Jr., a spokesperson for the Palestinian Authority. "The Israeli government is methodically implementing a policy of annexation that eliminates the possibility of a two-state solution. The international community must move beyond condemnations to concrete action."

The United Nations, the European Union, and numerous individual countries consider Israeli settlements in the West Bank and East Jerusalem—territories captured by Israel in the 1967 Mideast war—to be illegal under international law. Israel disputes this, citing historical and security claims to the land.

International Alarm and US Position

The decision puts Israel's government on a potential collision course with its closest ally, the United States. Successive U.S. administrations, both Republican and Democratic, have opposed construction in E1, viewing it as a "red line" that would critically undermine the viability of a future Palestinian state.

A U.S. State Department spokesperson reiterated Washington’s long-standing position in a statement Friday. "We are deeply troubled by the Israeli government’s announcement. The United States has consistently opposed settlement expansion, and advancing this particularly sensitive project would be damaging to the prospects for a two-state solution."

The current Israeli coalition government includes several hardline nationalist parties who have made settlement expansion a top priority. Minister Smotrich, who also holds a position in the Defense Ministry overseeing West Bank civilian affairs, has been a vocal advocate for annexing large parts of the territory.

Analysts suggest the timing of the announcement could be intended to test international resolve and solidify facts on the ground while global attention is focused on other crises. The move underscores the profound influence of the pro-settlement faction within Israel's current political landscape and raises serious questions about the future of the Israeli-Palestinian peace process, which has been dormant for over a decade.