Last month, 11 countries issued a warning to contractors who would bid for construction in the area, stating they risked legal and reputational consequences. A diplomatic source told Haaretz that the German chancellor discussed construction in the area with Netanyahu

by Lisa Rozovsky           10 June 2026             Haaretz

The E1 area between Jerusalem and Jericho in the West Bank, in May. Credit: Itay Cohen

An Israeli government tender for 3,401 housing units in the highly contested E1 area between Jerusalem and the settlement of Maale Adumim has been delayed for a third time, despite government approval of the project last year, as foreign governments intensify diplomatic efforts to halt construction. Finance Minister Bezalel Smotrich has previously described construction in the area as "burying the two-state solution."

Last month, 11 countries issued a rare warning to contractors that participating in the project could carry legal and reputational risks linked to alleged violations of international law.

Despite this, Israel's Housing Ministry told Haaretz that it is in the final stages of formulating development costs for the project, adding that marketing bids would be published in the coming month.

A diplomatic source told Haaretz that German Chancellor Friedrich Merz, whose country signed the statement, recently raised the issue of the planned construction in the area in a conversation with Prime Minister Benjamin Netanyahu.

Far-right Finance Minister Bezalel Smotrich announces the settlement construction plan in the West Bank's E1 area, in August. Credit: Olivier Fitoussi

Germany's opposition to the plan is notable, given its reputation as one of Israel's close allies and a frequent shield against EU sanctions.

Another Western diplomat noted that the countries that signed the statement "are serious about consequences for companies that become involved in any construction in E1."

Less than two weeks ago, French Foreign Minister Jean-Noël Barrot said in an interview with France Inter radio that "any company that responds to the call to bid on the project will expose itself to international sanctions."

On Tuesday, the United Kingdom, Norway, Canada and France mentioned the E1 area construction plan in a joint statement, saying it undermines a two-state solution. The statement came as the countries announced new sanctions on six right-wing organizations linked to illegal outposts and so-called farms in the West Bank, as well as on far-right activist Itamar Yehuda Levi. Levi's brother, Yinon Levi, was filmed shooting Awdah Hathaleen to death in the West Bank village of Umm al-Kheir in July 2025.

In September, the Ma'aleh Adumim municipality and the government signed a framework agreement worth 3 billion shekels ($1 billion), which included the addition of approximately 7,600 housing units on state-owned land and the development of commercial and employment areas in a way that is expected to double the city's population.

Netanyahu was present at the signing, where he said, "No Palestinian state will be established." Netanyahu jokingly turned to Zeev Elkin, who serves as an additional minister at the Finance Ministry, saying, "Zeev, are you also a resident of the occupied territories? This is the occupied territory. Joshua conquered it! This is the territory of the people of Israel and the Land of Israel." The audience cheered.

Last month, far-right Finance Minister Bezalel Smotrich said he had been informed of the International Criminal Court's move to issue an arrest warrant against him.

After Haaretz revealed that the world court's top prosecutor had requested sealed arrest warrants issued for Smotrich and far-right National Security Minister Itamar Ben-Gvir, Smotrich said he would immediately sign an order to clear the Palestinian village of Khan al-Ahmar in the West Bank.

The village lies within Israel's E1 area designated for construction.

The E1 area in the West Bank, in August. Credit: Olivier Fitoussi

Smotrich announced the E1 construction plan at a festive ceremony in August, which he held with the mayor of a West Bank settlement and the council of the Yesha Council, which represents Israeli settlers in the West Bank.

The minister then said that the project was the answer to the "false Palestinian dream," in response to several Western countries recognizing a Palestinian state. "The Palestinian state is being erased – not in slogans, but in actions," he said at the time.

The E1 construction plan was previously promoted by Prime Minister Ariel Sharon, but was blocked by the George W. Bush administration. Since then, the plan has repeatedly come up and been blocked by pressure from Brussels and Washington.

In 2014, the European Union defined construction in the E1 area as one of the red lines seen as the final nails in the coffin of a future Palestinian state. The Prime Minister's Office and Smotrich's office declined to comment. Ma'aleh Adumim Mayor Guy Yifrach did not respond.

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