Israeli far-right Finance Minister Bezalel Smotrich has said plans to build more than 3,000 homes in a controversial settlement project in the occupied West Bank will “bury the idea of a Palestinian state”.

The so-called E1 project between Jerusalem and the Maale Adumim settlement has been frozen for decades amid fierce opposition internationally. Building there would effectively cut off the West Bank from occupied East Jerusalem and significantly obstruct its territorial contiguity.

Smotrich said it would thwart the idea of a Palestinian state “because there is nothing to recognise and no one to recognise”.

Settlements are considered illegal under international law, though Israel disputes this.

They are one of the most contentious issues between Israel and the Palestinians.

About 700,000 settlers live in approximately 160 settlements in the West Bank and East Jerusalem, according to the Israeli anti-settlement group Peace Now. It is land Palestinians seek for a future independent state.

“After decades of international pressure and freezes, we are breaking conventions and connecting Maale Adumim to Jerusalem,” Smotrich said.

“This is Zionism at its best – building, settling and strengthening our sovereignty in the Land of Israel.”

It follows declarations in recent days by a growing number of countries of their intention to recognise a Palestinian state in coming months, which Israel has denounced.

Announcing the plan at a news conference with settler organisation Yesha Council Chairman Israel Ganz and Maale Adumim Mayor Guy Yifrach, Smotrich said the land had been given to the Jews by God.

When asked by the BBC what message the plans sent to the likes of the UK and France, which plan to recognise a State of Palestine later this year, he said: “It’s not going to happen. There will be no state to recognise.”

Peace Now said: “The Netanyahu government is exploiting every minute to deepen the annexation of the West Bank and prevent the possibility of a two-state solution.

“It is clear to everyone today that the only solution to the conflict, and the only way to defeat Hamas, is through the establishment of a Palestinian state alongside Israel.

“The Government of Israel is condemning us to continued bloodshed, instead of working to end it.”

The Palestinian foreign ministry called the new settlement plan “an extension of crimes of genocide, displacement and annexation”.

Israel has long rejected such accusations, but leading Israeli human rights organisations have argued that the country’s conduct in the war in Gaza constitutes genocide against the Palestinian population.

Smotrich, together with national security minister Itamar Ben-Gvir, was sanctioned by the UK in June over “repeated incitements of violence against Palestinian communities” in the occupied West Bank.

The construction of 3,401 housing units in the E1 area has been frozen for 20 years. Developing the area has long been seen as effectively blocking the establishment of a Palestinian state, because of its strategic position separating areas south of Jerusalem from those to its north, preventing a contiguous Palestinian urban area connecting Ramallah, East Jerusalem and Bethlehem.

Since Hamas’s attack on Israel on 7 October 2023, Israel’s pressure on West Bank Palestinians has increased sharply, justified as legitimate security measures.

The vast majority of the international community considers the settlements illegal under international law – a position supported by an advisory opinion of the International Court of Justice (ICJ) last year.