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Israel Opens Tenders for 1,234 E1 Settlement Homes in West Bank as Allies Condemn Move

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Market Uncertainty in Shifting Geopolitics Affects Consumer Finance

Israel has opened bidding on 1,234 homes in the E1 area of the occupied West Bank, and the reaction from allies came fast. The tenders, reported by Al Jazeera on 21 August 2026, mark the first concrete step toward building on a plot that critics say would cut Palestinian territory in two.

E1, short for East 1, is a stretch of land about 12 square kilometres in size. The full plan covers more than 3,400 housing units and would create a belt of Israeli settlement running from occupied East Jerusalem to Ma’ale Adumim, roughly 7km east of the city. That would sever the West Bank from East Jerusalem, the city Palestinians have for years pictured as the capital of their future state. Under international law, settlements in the occupied territory are illegal.

An old plan, revived

The idea dates to 1991, under Prime Minister Yitzhak Shamir, and moved forward under Yitzhak Rabin in 1994. Israel did preliminary infrastructure work in 2004, building roads and a police headquarters. Homes never followed, as successive US and European governments cautioned that building there would endanger the territorial integrity of any future Palestinian state, and Israel postponed the plan again in 2022 under US pressure.

Then came Donald Trump’s second term. Analysts told Al Jazeera it gave Prime Minister Benjamin Netanyahu’s government a friendlier climate for settlement growth. In August 2025, Finance Minister Bezalel Smotrich stood at a press conference in Ma’ale Adumim and announced 3,401 new units. “Those who try to recognize a Palestinian state will get an answer from us on the ground,” he said, as Ynet reported. Israel gave final approvals that month.

The response

The Palestinian Authority and the United Kingdom spoke out first, on 19 August. Britain’s foreign secretary, Ed Miliband, described the step as an “unacceptable and destructive act”. He said he had told Israel’s foreign minister, Gideon Sa’ar, to withdraw the tender, and the Israeli chargé d’affaires was summoned. Britain, he said, “will not stand back and accept the destruction of the two-state solution”.

A day later a joint statement came from the UK, France, Germany, Italy, the Netherlands, Canada and Norway. They called the tenders “unacceptable” and warned participants of “legal and reputational consequences”. Palestinian Authority President Mahmoud Abbas welcomed it and asked for concrete measures. Foreign ministers from Egypt, Indonesia, Jordan, Pakistan, Qatar, Saudi Arabia, Turkiye and the United Arab Emirates asked for action to halt the plan too. The United States did not criticise E1 itself, but its State Department said Washington does not support Israel annexing the West Bank.

Israeli officials pushed back. Sa’ar criticised what he called the “patronising tone” of Miliband’s statement. Bids were due to close on 19 October, with a general election scheduled for 27 October. Nimrod Flaschenberg, an Israeli analyst, told Al Jazeera the timing was no coincidence, and that Smotrich and even Netanyahu were benefiting from the outrage.

The advocacy group Ir Amim noted that the tenders were published despite a legal challenge that could decide the project’s future.

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