Israel’s decision to advance a major settlement project in the occupied West Bank has triggered unusually coordinated criticism from leading European countries and Canada, reviving an international dispute over whether the two-state solution can survive continued Israeli territorial expansion. The controversy centres on the E1 West Bank settlement plan, under which Israel has opened tenders for 1,234 housing units east of occupied East Jerusalem.
The tender belongs to a larger project, which includes 3,401 housing units built on an area of 12 square kilometres in the stretch of land between Jerusalem and the Israeli settlement of Ma’ale Adumim. Britain, France, Germany, Italy, the Netherlands, Norway, and Canada denounced the decision in a statement released on Thursday.
They described the decision as unacceptable and asked Israel to cancel the tender and discouraged companies from taking part in the project due to legal and reputational concerns. The significance of this plan is determined by its timing and geographical location. E1 is not just another Israeli settlement area in the West Bank; it is a strategic corridor that would make it easier for Israel to separate the land into two unconnected parts – north and south – separate East Jerusalem from other Palestinian territories and complicate the formation of a continuous Palestinian state.
A settlement project with wider consequences
The tender for the first stage of the project was released on August 18 by the Israeli organization Peace Now. The total number of houses included in the tender is 1,234; however, the total number of homes planned in the entire project that has been approved by Israel stands at 3,401. This project will create a developed connection between the two places, namely, Ma’ale Adumim and Jerusalem. Ma’ale Adumim is considered one of the biggest Israeli settlements in the West Bank, with its population estimated at 38,000 to 40,000 people. The project will be able to settle another 12,000 to 15,000 people in the settlement.
However, for Palestinians and many foreign countries, the problem does not lie in the amount of houses only, as this development can help create Israeli territorial continuity around Jerusalem but disrupt the territorial continuity of Palestine. The E1 area lies between several centers of Palestinian population, including Ramallah in the north and Bethlehem in the south. Roads, security zones, and other infrastructure can only make movement more difficult for Palestinians.
The European Union described the settlement drive in its 2025 report as an acceleration of Israel’s transformation of the occupied Palestinian territory. The report said Israel advanced plans for 54 new official settlements in the West Bank, excluding East Jerusalem, while 86 new outposts were established during the year.
The EU also reported that planning or final authorisation advanced for 27,941 housing units in West Bank settlements and another 35,370 units in occupied East Jerusalem. Together, the figures represented 63,311 housing units advanced through planning in the occupied Palestinian territory during 2025.
Seven governments issue a warning
The joint statement by Britain, France, Germany, Italy, the Netherlands, Norway and Canada presented the E1 project as a direct challenge to the international framework for a negotiated settlement. The governments said:
“The Israeli Government’s decision to publish construction tenders for the E1 settlement project is unacceptable.”
They warned that the plan would
“undermine the prospect of the two-state solution by driving a wedge through the West Bank and harming the territorial contiguity of the Palestinian Territories.”
Their warning was directed not only at Israel but also at private companies that could participate in construction. The governments said businesses involved in the project could face legal and reputational consequences, a message designed to raise the financial and compliance risks associated with the tenders.
The statement called for an immediate withdrawal of the construction plans and urged Israel to halt settlement expansion throughout the West Bank. It also reiterated the long-standing European and Canadian position that settlements in territory occupied since 1967 violate international law.
The composition of the group is politically important. Germany and France are among Israel’s most important European partners, while Britain remains a major diplomatic and economic actor. Canada has traditionally maintained close ties with Israel. Their decision to issue a joint warning indicates that concern over E1 has extended beyond governments that regularly adopt a more critical position on Israeli policy. Norway’s participation is also notable because of its historic role in Middle East diplomacy and its involvement in international coordination of aid to the Palestinians.
Britain’s unusually direct response
Britain delivered one of the strongest responses. Foreign Secretary Ed Miliband described the tender as “an unacceptable and destructive act” and said Israel should withdraw it immediately. He added that Britain
“will not stand back and accept the destruction of the Two-State Solution.”
London also called the Israeli chargé d’affaires to express its protest. It was made clear that more actions could be taken, for example, individual sanctions could be imposed on persons involved in illegal expansion of settlements. Thus, the reaction of London shows that there is a growing difference between the settlement policies of Israel and the diplomatic stance of many Western countries. While the governments of Europe have always expressed condemnation of building of settlements, they have never gone ahead to impose economic sanctions. This warning to firms could be more significant than the diplomatic language. If contractors, banks, and investors realize that such activity might lead them into law suits or economic sanctions, it will pose serious economic problems for the project.
Israel rejects foreign criticism
Israel has rejected the criticism and defended the project as part of its right to develop Jewish communities in its historic homeland. Foreign Minister Gideon Sa’ar attacked Britain’s position after Miliband condemned the tender. Sa’ar described it as “absurd” for Britain to lecture the Jewish people about where they could live in what he called their “historic tiny homeland.” He also accused Britain of ignoring Palestinian militant activity while placing responsibility for the deterioration in relations on Israel.
Bezalel Smotrich, Finance Minister and prominent settler politician who backs plans for Israeli sovereignty in the West Bank, took an ideological approach. He has stated that the E1 project is about the connection of Jerusalem with Ma’ale Adumim, and that settlement construction should block the formation of a Palestinian state. The official Israeli stance is that the West Bank is disputed territory and not occupied territory in legal terms. The Israeli claim is that their historical and religious claims and security needs provide justification for settlement building. This approach is opposed by the United Nations, the European Union and virtually all governments. The international consensus is that Israel occupies the West Bank, including East Jerusalem, and that the transfer of its civilian population into occupied territory constitutes a violation of international law.
The legal dispute behind the condemnation
The international legal position is anchored in UN Security Council Resolution 2334, adopted in December 2016. The resolution states that Israeli settlements in the Palestinian territory occupied since 1967, including East Jerusalem, “have no legal validity” and constitute a “flagrant violation” of international law.
It also identifies settlements as a major obstacle to peace and calls on states to distinguish between Israel and the territories it has occupied since 1967. Israel disputes that interpretation. Its successive governments have argued that the final status of the West Bank should be determined through negotiations and that the territory cannot be classified in the same way as land belonging to a sovereign Palestinian state. The disagreement is not merely semantic. It affects the legality of land seizures, planning decisions, infrastructure construction, commercial participation and the responsibilities of foreign states and businesses. The seven-country warning that companies could face legal consequences reflects the continuing attempt to translate the international legal position into practical pressure.
Palestinian reaction and fears of fragmentation
The Palestinian leaders have said that the project threatens the chance of creating the state itself. The president of Palestine has stated that Israel was moving the whole situation towards an uncontrollable condition due to their actions, the violence of settlers and the killing of Palestinians. The Foreign Ministry of Palestine has called all companies to avoid participating in the E1 project, as their direct or indirect participation in any settlement activities contradicts international law.
For the Palestinian government, the problem is a continuation of the whole trend. Building of settlements, expanding outposts, road systems and restricting the development of Palestinian territories have already divided the West Bank into disconnected pieces with the Israeli-controlled infrastructure. The E1 project will be especially harmful due to the area where it will be constructed. It will leave the Palestinians in the north and south without territorial connection and make them move via Israeli-controlled roads. Critics believe that even if there will be a state called Palestine, it won’t have enough geographic unity to be independent politically and economically.
Settlement expansion amid rising violence
The E1 tender comes as settlement activity and settler violence have intensified.
The European Union’s report recorded 1,828 settler attacks during 2025 that caused casualties or property damage across approximately 280 Palestinian communities. Nine Palestinians were killed and 838 injured in settler attacks during the year. The data has increased pressure on European governments to move beyond statements. Palestinian officials and human rights groups argue that condemnation without sanctions has failed to deter settlement expansion.
Peace Now reported that 2025 saw 86 new outposts, including agricultural farms, and described the pace as equivalent to roughly one or two new outposts every week. It also said Israel approved 41 new settlements in 2025, making the year one of the most extensive periods of settlement expansion on record. The EU has described these developments as evidence of a policy aimed at creating irreversible facts on the ground. Israel, however, presents settlement construction as a security and national development issue and rejects the characterisation of the policy as annexation.
Election timing raises political questions
According to the tender’s announcement, its submission deadline falls on October 19th. This date is just two weeks before Israel’s general elections scheduled for October 27th. The timing of the project’s development may imply that the tender was advanced too close to the upcoming elections to make a potential future Israeli government back out of the project due to political and legal difficulties that would arise once contracts were signed and commitments made. This may also mean that the tender provides an opportunity for settlement supporters to ensure the implementation of the project before there is a chance for the change in government. In addition, the timing of the tender enables the current government to prove its loyalty to the settlers’ movement, which is a crucial part of Israel’s ruling coalition.
