See the full text of the TJ briefing by Daniel Seidemann here: TJ Analysis of E1 Developments
Israeli media is reporting that the government has backtracked from discussing a formal West Bank annexation proposal, removing it from the September 5 cabinet agenda amid intense external pressure. Prime Minister Benjamin Netanyahu reportedly shelved plans to consider Smotrich’s plan to extend sovereignty over 82% of the West Bank after a stark warning from the United Arab Emirates that any annexation would cross a “red line” and jeopardise regional integration – a position held by the UAE since the first Trump administration. However, this political reversal has not halted de facto annexation on the ground. Construction and settlement expansion – especially the strategic “E‑1” project near Jerusalem – are accelerating, risking irrevocable facts on the ground that undermine a Palestinian State. The E‑1 plan, now fully approved at the planning level, would sever East Jerusalem from the West Bank and fragment Palestinian territory, effectively foreclosing the prospect of a viable Palestinian state. This brief analyses why Israel paused formal annexation, how “creeping annexation” continues via E‑1, the timeline and legal stages of the E‑1 project, and actionable steps for international policymakers, including the UK government, suggested by Terrestrial Jerusalem.
E‑1: Engine of De Facto Annexation
Located on a 12 km stretch of land between East Jerusalem (already unilaterally annexed by Israel) and the large Ma’ale Adumim settlement, the E‑1 plan has long been recognised as a “doomsday” project for the two-state solution. If built, E‑1 would physically sever the northern and southern West Bank and isolate Palestinian neighborhoods of East Jerusalem, making a contiguous Palestinian State virtually impossible. For nearly three decades, firm international consensus held E‑1 as a red line: the United States, EU, and others repeatedly pressured Israeli governments to freeze the plan, understanding its devastating impact on any peace map. The second Trump administration has, however, been indifferent to or supportive of annexation.
On August 20, the Israeli Higher Planning Committee for the West Bank gave final statutory approval to the E‑1 plan – crossing the very red line that foreign capitals had warned against for years. Israeli officials wasted no time celebrating this milestone. Finance Minister Bezalel Smotrich (a chief architect of the annexationist agenda) announced that work would soon begin on E‑1, touting that this long-delayed settlement will “bury the idea of a Palestinian state”. In essence, while Netanyahu’s cabinet backed off a formal sovereignty grab, his coalition is rapidly entrenching “sovereignty by concrete” – using bulldozers and blueprints to achieve irreversible control over critical areas. This “creeping annexation”: instead of declaring new borders by law, Israel expands settlements, infrastructure, and land administration in a way that steadily absorbs the occupied territory.
International condemnation of the plan’s approval has so far been purely rhetorical, with no punitive actions to halt it. Emboldened by the lack of concrete consequences, Israeli authorities have advanced on-the-ground preparatory steps. Israel’s current leadership sees this period as an opportune moment – under cover of war and backed by a friendly U.S. administration – to push through transformative settlement projects like E‑1 that had been politically untenable in the past.
Timeline and Legal Levers: Where E‑1 Stands Now
With the E‑1 plan now fully approved at the planning level, it has entered the next phase of Israel’s settlement construction pipeline. According to Terrestrial Jerusalem, there are three main stages to establishing a new settlement like E‑1:
- Statutory Planning – Drafting and approval of the urban plan. This involves site plans being deposited, public objections heard, and the plan receiving final approval from planning authorities. No construction can legally occur before this stage is complete. E‑1 has completed this stage as of August 20, 2025, when the Higher Planning Committee formally approved the project.
- Tendering – Government issuance of tenders and contracting of developers. Israel’s Ministry of Housing and Israel Land Authority will publish tenders inviting bids from developers to construct the approved number of housing units according to the plan. After bids, the authorities will select winners and sign Development Agreements with the chosen contractors, who then take on the obligation to build the units on the state-owned land.
- Licensing & Construction – Developers obtain building permits and commence work. The contracted developer submits detailed plans to obtain a building permit, which local authorities issue under the now-approved master plan. Only after the permit is issued can physical construction begin on the ground. In practice, once permits are granted, “actual construction is a foregone conclusion”.
E‑1 is currently at the cusp of the Tender stage. Having secured statutory approval, the government could publish tenders for E‑1’s ~3,000 housing units at any moment. Notably, this tendering process is expected within a matter of months, as officials have signaled their intent to expedite E‑1’s implementation. The window of opportunity to halt the project is therefore very narrow.
Targeted Deterrence to Freeze E‑1
To stop E‑1 before it starts, Terrestrial Jerusalem, advises the international community to deploy a calibrated strategy of “anticipatory accountability.” This means signaling now, in advance, that proceeding with E‑1 will trigger tangible consequences – not as a punitive measure for Israel’s past decisions, but to deter further implementation. The goal is to raise the political, economic, and legal costs so high that Israeli authorities and private actors alike conclude that E‑1 is not worth the risk. Importantly, this approach focuses on the enablers of construction (contractors, financiers, planners), creating a climate where no one is willing to pour concrete for E‑1. Key recommendations include:
- Governments should put on formal notice any entities – public or private, inside Israel or outside – contemplating participation in the E‑1 project – they may be at risk of reputational damage and sanctions.
- While the initial deterrent declaration of intent need not enumerate exact sanctions, states should hint at the range of measures under consideration. This could include barring involved contractors or financial institutions from doing business in their jurisdictions, exclusion from government contracts, reputational blacklisting, or even legal action under domestic laws (for example, violations of international law or human rights statutes).
- Israel has to calculate that proceeding with E‑1 could strain not just one bilateral relationship but many, and that companies involved might be shut out of multiple markets simultaneously. Quiet coordination can ensure the messaging is delivered around the same time for maximum effect, even if not through one single statement.
- Israeli agencies may issue E‑1 tenders within weeks, and developers will be making go/no-go choices in the coming weeks and months, making the international red lines explicit ahead of time will undermine the Israeli calculus that it can finalise E‑1 with mere rhetorical pushback.
- Policymakers can point to recent success stories where international pressure halted settlement entanglements. For example, several foreign engineering firms have opted out of lucrative infrastructure projects in East Jerusalem (such as the Jerusalem Light Rail extension and the Old City cable car) due to concerns about legal and reputational fallout in Europe
For the UK there are a number of companies that might be contemplating involvement in the E1 settlements based on past record. This is not to say that they are involved but that they have previously been involved in settlement construction and financing. The UK government should put these companies and any others with relevant goods and services that might be required that they are at risk, as outlined above, if they take part.
See further discussion of the complicity of the private sector here: FROM ECONOMY OF OCCUPATION TO ECONOMY OF GENOCIDE, Report of the Special Rapporteur on the situation of human rights in the Palestinian territories occupied since 1967.