Published by Global Banking and Finance Review
Posted on September 11, 2025
2 min readLast updated: January 21, 2026
Netanyahu approves a controversial West Bank settlement plan, rejecting a Palestinian state, potentially straining international relations.
By Steven Scheer
JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu signed an agreement on Thursday to push ahead with a controversial settlement expansion plan that would cut across land that the Palestinians seek for a state.
"There will never be a Palestinian state. This place is ours," Netanyahu said during a visit to the Maale Adumim settlement in the West Bank where thousands of new housing units would be added.
"We will safeguard our heritage, our land, and our security."
Last month, the E1 project, which would bisect the occupied West Bank and cut it off from East Jerusalem, received final approval from a Defence Ministry planning commission.
Netanyahu was joined by nationalist members of his coalition, including far-right Finance Minister Bezalel Smotrich, who in August said a Palestinian state "is being erased from the table, not with slogans but with actions."
The move, coming two days after Israel tried to kill Hamas leaders in Qatar and was roundly condemned, may add to already strained relations with many of its allies.
Restarting the project could further isolate Israel, which has watched some Western allies frustrated by its continuation and planned escalation of the Gaza war announce they may recognise a Palestinian state at the United Nations General Assembly later this month.
E1 is located adjacent to Maale Adumim and was frozen in 2012 and 2020 amid objections from the U.S. and European governments.
Total investment in the project, which will include adding roads and upgrading major infrastructure, is estimated at nearly $1 billion.
Western capitals and campaign groups have opposed the settlement project due to concerns that it could undermine a future peace deal with the Palestinians.
The two-state solution to the decades-old Israeli-Palestinian conflict envisages a Palestinian state in East Jerusalem, the West Bank, and Gaza, existing side by side with Israel.
Most of the international community considers Israeli settlements in the West Bank illegal under international law.
($1 = 3.3235 shekels)
(Reporting by Steven Scheer; Editing by Alex Richardson, Alexandra Hudson)
Netanyahu stated, 'There will never be a Palestinian state. This place is ours,' during his visit to the Maale Adumim settlement.
The E1 project aims to bisect the occupied West Bank and cut it off from East Jerusalem, with plans to add thousands of housing units.
Most of the international community considers Israeli settlements in the West Bank illegal under international law and opposes the settlement project due to concerns about undermining a future peace deal.
The total investment in the E1 project is estimated at nearly $1 billion, which includes adding roads and upgrading major infrastructure.
The move has been roundly condemned and may further strain Israel's relations with many of its allies, especially as some Western nations express frustration with Israel's actions.
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