Israeli Prime Minister Benjamin Netanyahu signed an agreement on Thursday to push ahead with a controversial settlement expansion plan that would cut across land that the Palestinians seek for a state.
"There will not be a Palestinian state," Netanyahu said during a visit to the Maale Adumim settlement in the West Bank, where thousands of new housing units would be added.
Last month, the unlawful E1 project, which would bisect the occupied West Bank and cut it off from East Jerusalem, received final approval.
"We will safeguard our heritage, our land and our security... We are going to double the city's population." The event was streamed live by his office.
Israel has long had ambitions to build on the roughly 12 square kilometre (five square mile) tract of land known as E1, but the plan had been stalled for years in the face of international opposition.
The site sits between Jerusalem and the Israeli settlement of Maale Adumim, near routes connecting the north and south of the Palestinian territory.
Last month, Israel's far-right Finance Minister Bezalel Smotrich backed plans to build around 3,400 homes on the ultra-sensitive parcel of land.
His announcement drew condemnation, with UN chief Antonio Guterres saying the settlement would effectively cleave the West Bank in two and pose an "existential threat" to a contiguous Palestinian state.
All of Israel's settlements in the West Bank, occupied since 1967, are considered illegal under international law, regardless of whether they have Israeli planning permission.
Several Western governments, including Britain and France, have announced they intend to recognize the State of Palestine at the United Nations later this month.
Britain has said it will take the step if Israel fails to agree to a cease-fire in the devastating Gaza war.
Far-right Israeli ministers have in recent months openly called for Israel's annexation of the territory.
Israeli NGO Peace Now, which monitors settlement activity in the West Bank, said last week that infrastructure work in E1 could begin within a few months, and housing construction within about a year.
It said the E1 plan was "deadly for the future of Israel and for any chance of achieving a peaceful two-state solution."
The E1 area, a stretch of land east of Jerusalem, has long been viewed by Palestinian officials and rights groups as a critical link between the northern and southern parts of the West Bank. Settlement construction there is widely seen as a “red line” that would make a viable, contiguous Palestinian state impossible.
International observers have repeatedly warned that such expansion plans not only breach Israel’s obligations under international law but also inflame tensions and further entrench its occupation of Palestinian lands.