Britain warns the project could undermine a two-state solution and urges businesses to avoid construction contracts in the occupied West Bank

The United Kingdom has strongly condemned Israel’s decision to publish construction tenders for the E1 settlement project in the occupied West Bank, warning on Thursday, August 20, 2026, that the development could undermine prospects for a negotiated two-state solution.

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British Foreign Secretary Ed Miliband described the decision as “unacceptable and destructive”, while the UK Government urged Israel to withdraw the tenders and called on businesses not to participate in the project.

The latest move concerns the E1 area between Jerusalem and the Israeli settlement of Ma’ale Adumim.

Israeli authorities have opened a tender for 1,234 housing units, forming part of a wider plan for about 3,400 homes in the area.

Miliband warned that the project could have serious territorial consequences for a future Palestinian state.

“E1 would cut across the heart of Palestine and risks separating the West Bank from East Jerusalem,” he said, according to the UK Government’s position reported on the issue.

The British Government said the proposed development would drive a wedge through the West Bank and harm the territorial contiguity of the Palestinian territories, making a viable Palestinian state more difficult to achieve.

The warning comes after months of international concern over Israel’s settlement expansion in the West Bank and rising settler violence against Palestinians.

Britain has maintained that Israeli settlements in the occupied West Bank are contrary to international law and has repeatedly warned that continued expansion threatens the prospects for peace.

The E1 project has attracted particular concern because of its strategic location.

Critics argue that construction in the area could create a continuous built-up link between Jerusalem and Ma’ale Adumim, effectively dividing the West Bank and making territorial continuity for a future Palestinian state significantly more difficult.

The European Union has similarly warned that construction in E1 would divide the West Bank and constitute a serious breach of international law.

The UK has also turned its attention to companies that could participate in the development.

British authorities warned businesses against bidding for construction tenders connected to E1 or other Israeli settlements, saying companies should consider potential legal and reputational consequences.

The warning reflects a broader British policy shift on economic activity connected to Israeli settlements.

In June, the UK strengthened its guidance to British businesses and citizens, advising against economic and financial activity in illegal settlements.

The issue has also moved beyond diplomatic criticism.

Britain summoned Israel’s chargé d’affaires over the E1 project and has indicated that further measures could follow if settlement expansion continues.

The Israeli Government, however, has rejected the criticism.

Israeli Foreign Minister Gideon Sa’ar dismissed Miliband’s intervention as patronising and accused Britain of pursuing a one-sided approach towards Israel.

“I reject outright the statement of the UK Foreign Secretary and the patronising tone of his words,” Sa’ar said.

The disagreement reflects the increasingly strained diplomatic debate over Israel’s settlement policy and the future of the Israeli-Palestinian conflict.

Israel has long maintained security and political claims over areas of the West Bank, while Palestinians and much of the international community regard the territory as occupied Palestinian land intended to form part of a future independent state.

The United Nations and other international actors have consistently opposed settlement expansion, arguing that settlements undermine the possibility of achieving a negotiated settlement based on two states.

The latest E1 settlement tenders also come as conditions in the West Bank remain deeply volatile.

The British Government has highlighted unprecedented levels of settler violence, restrictions affecting the Palestinian economy and growing instability in the territory.

International concern has intensified as settlement construction continues alongside calls for restraint, accountability and renewed diplomatic efforts.

The E1 plan has been under legal challenge in Israel, with petitions concerning the development still pending before the Jerusalem District Court.

According to Israeli rights group Ir Amim, the court has required the state and Ma’ale Adumim municipality to respond to the petitions, although no injunction currently prevents the tender process.

The tender process therefore represents a significant step towards implementation of a project that has remained politically contentious for decades.

For Britain and its international partners, the concern extends beyond individual housing units.

The central issue is whether developments in strategically sensitive parts of the West Bank could permanently alter the geography required for a future Palestinian state.

The UK Government has reiterated its support for a comprehensive and lasting peace based on a negotiated two-state solution, with Israel and Palestine living alongside each other in peace and security.

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The dispute over E1 now places that diplomatic objective against another potentially consequential development on the ground, with Britain warning that continued settlement expansion could make an already difficult path to peace even more challenging.