The Israeli government’s latest moves in the West Bank and Gaza have ignited a firestorm of international criticism and deepened fears that the dream of a two-state solution is slipping further out of reach. On September 12, 2025, Israeli Prime Minister Benjamin Netanyahu made a declaration that reverberated across the world: “There will not be a Palestinian state.” Speaking at Maale Adumim, an Israeli settlement east of Jerusalem, Netanyahu presided over the signing of a major settlement expansion, vowing to double the city’s population and safeguard what he called Israel’s heritage, land, and security. The event, broadcast live by his office and reported by Daijiworld Media Network, marked a pivotal moment in the long-running Israeli-Palestinian conflict.
The expansion, known as the E1 project, is a 12-square-kilometre tract of land linking Jerusalem to Maale Adumim. For more than two decades, development plans for this area were frozen, largely due to pressure from previous U.S. administrations and widespread international opposition. Critics have long warned that building in E1 would effectively split the West Bank in two, making a contiguous Palestinian state all but impossible.
But the Israeli government is now pushing forward with renewed vigor. Last month, far-right Finance Minister Bezalel Smotrich endorsed the construction of 3,400 housing units in the sensitive area, drawing sharp condemnation from the United Nations and Western governments. UN Secretary-General Antonio Guterres warned the move poses an “existential threat” to any two-state solution, while British Foreign Secretary David Lammy called it “a flagrant breach of international law.” Germany’s Foreign Ministry also strongly rejected the approval, emphasizing that the settlement construction violates both international law and UN Security Council resolutions.
Despite the international outcry, Israel’s Higher Planning Committee gave final approval for the E1 project in August 2025. Smotrich, a former settler leader, was blunt in his assessment, saying, “The Palestinian state is being erased from the table not with slogans but with actions. Every settlement, every neighbourhood, every housing unit is another nail in the coffin of this dangerous idea.” According to BBC and other outlets, several Western countries, including the UK and the Netherlands, have recently sanctioned Smotrich and National Security Minister Itamar Ben-Gvir for inciting settler violence and calling for the ethnic cleansing of Gaza.
The stakes are immense. The E1 corridor is one of the last remaining geographical links between Ramallah in the north and Bethlehem in the south—two major West Bank cities just 22 kilometres apart. For Palestinians, this region was supposed to serve as a vital artery in any future state. Yet, as things stand, traveling between these cities requires a wide detour through multiple Israeli checkpoints, turning a short drive into a grueling journey that can take hours.
According to Peace Now, an Israeli NGO that tracks settlement activity, infrastructure work in E1 could begin within months, with housing construction possibly starting within a year. The group warned that the plan is “deadly for the future of Israel and for any chance of achieving a peaceful two-state solution.” Under international law, all Israeli settlements in the West Bank, occupied since 1967, are deemed illegal. Still, about 500,000 Israeli settlers now live alongside nearly 3 million Palestinians in the territory.
The international community is not standing idly by. Several Western nations, including Britain and France, have signaled plans to formally recognize the State of Palestine at the United Nations later this month, especially if Israel fails to agree to a ceasefire in Gaza. These diplomatic maneuvers highlight the growing sense of urgency—and frustration—among world leaders as the situation on the ground deteriorates.
Meanwhile, Gaza itself is at the center of another controversial vision. A leaked document, the Gaza Reconstitution, Economic Acceleration and Transformation (Great) Trust blueprint, reveals a US$100 billion investor-led plan for the strip’s reconstruction. First published by the Washington Post and analyzed by The Conversation, the plan proposes blockchain-based trade initiatives, data centers, and “world-class resorts”—all aligned with the India-Middle East-Europe Corridor (Imec). The images and details evoke Gulf urbanism, with echoes of Dubai’s transformation since the 1980s, and are rooted in the libertarian ideologies of charter cities and the authoritarian control of oil-rich monarchies like the UAE and Saudi Arabia.
The blueprint, reportedly aided by former partners at Boston Consulting Group and discussed at the Tony Blair Institute (both organizations have since distanced themselves), includes prestige waterfront developments, special economic zones with favorable tax conditions, and green technologies. But it also features massive Israeli security buffer zones. Critics argue that the plan is less about reconstruction and more about the erasure of the Palestinian presence in Gaza. The Conversation notes that the plan “has little space for the 2.3 million Palestinians living in Gaza,” with reports of residents being offered up to US$5,000 to temporarily relocate for the so-called “Riviera.”
According to Forensic Architecture, a group of researchers who investigate state violence, the Israel Defense Forces’ destruction of Gaza’s civil infrastructure—what scholars call urbicide—has been nearly complete in many areas, setting the necessary conditions for the new development. The plan, critics argue, relies on both the physical destruction of Gaza’s built environment and the expulsion of its population. As the International Association of Genocide Scholars and other groups have pointed out, Israel’s ongoing military operations have resulted in death and injury to tens of thousands of Palestinians, with accusations of genocide becoming more widespread.
Israeli historian and founder of Zionism, Theodor Herzl, once wrote, “If I wish to substitute a new building for an old one, I must demolish before I construct.” Many see the current blueprint for Gaza as the latest step in a long history of territorial control and displacement—from the forced transfer of Palestinians in 1948 (the Nakba), to illegal settlements between 1967 and 2005, to the blockade of Gaza since 2007. The logic, scholars argue, is one of elimination: to establish a new settler society on the land by erasing what came before.
As the world’s attention remains fixed on the war in Gaza, conditions for Palestinians in the occupied West Bank have also worsened. There has been a marked increase in attacks by settlers, evictions from Palestinian towns, military operations, and checkpoints that choke freedom of movement. The expansion of settlements is part of an increasingly dire reality for Palestinians, with the E1 project representing a critical juncture. If completed, it could permanently undermine the prospect of a sovereign Palestinian state and lock in a system of separation and inequality.
The debate over the future of Gaza and the West Bank is not just about land or legal technicalities—it’s about the fate of millions of people and the possibility of peace in one of the world’s most volatile regions. With each new announcement, the stakes grow higher, and the voices of those affected—Palestinians and Israelis alike—grow more urgent. The next few months may well determine whether the two-state solution survives as a viable path, or becomes just another chapter in the region’s long history of missed opportunities.
