Israeli Finance Minister Bezalel Smotrich displays a map of an area near the settlement of Maale Adumim, a land corridor known as E1, outside Jerusalem in the occupied West Bank, on Aug. 14, 2025. MENAHEM KAHANA / AFP VIA GETTY IMAGES

Israel's far-right finance minister announced approval Thursday of the construction of a contentious settlement in the Israeli-occupied West Bank that Palestinians and rights groups worry would scuttle plans for a future Palestinian state by effectively cutting the West Bank into two separate parts.

The announcement comes as several major U.S. allies have announced plans to recognize a Palestinian state in September.

"This reality finally buries the idea of a Palestinian state, because there is nothing to recognize and no one to recognize," said Finance Minister Bezalel Smotrich. "Anyone in the world who tries today to recognize a Palestinian state - will receive an answer from us on the ground."

Development in E1, an open tract of land east of Jerusalem, has been under consideration for more than two decades, but was frozen due to U.S. pressure during previous administrations. On Thursday, Smotrich praised President Trump and U.S. ambassador to Israel Mike Huckabee as "true friends of Israel as we have never had before."

The E1 plan hasn't yet received its final approval, which is expected next week. The plan includes around 3,500 apartments to expand the settlement of Maale Adumim, Smotrich said. While some bureaucratic steps remain, if the process moves quickly, infrastructure work could begin in the next few months and construction of homes could start in around a year.

Rights groups swiftly condemned the plan. Peace Now called it "deadly for the future of Israel and for any chance of achieving a peaceful two-state solution" that is "guaranteeing many more years of bloodshed."

The Palestinian foreign ministry called the plan an extension of crimes of what it says are genocide, displacement and annexation, the Reuters news agency reports. Israel fiercely denies those characterizations.

It wasn't immediately clear if Netanyahu backs the E1 plan, Reuters said.

Smotrich's popularity has dropped in recent months, Reuters notes, with polls showing his party wouldn't win a single seat if parliamentary elections were held today.

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