Settlement Policy

Introduction to Settlement Policy

Israeli settlement policy refers to the ways in which the State of Israel, together with various state agencies and private actors, plans, builds, legalizes, supports, and sometimes removes Jewish communities in territories it occupied in 1967, especially the West Bank and East Jerusalem, and in earlier decades the Gaza Strip and parts of the Sinai Peninsula and Golan Heights. This chapter looks at the logic, tools, and evolution of that policy, and how it has become a central issue in the conflict and in debates about occupation and resistance.

Settlement policy is not simply about people choosing to live somewhere. It is about state decisions on land use, infrastructure, security, and law, and about how those decisions shape the daily reality and future political possibilities for both Israelis and Palestinians.

Legal and Administrative Foundations

From 1967 onward, Israeli governments treated the West Bank and Gaza differently from Israel’s pre-1967 territory. Rather than formally annex the West Bank and Gaza as part of the state, Israel put them under military rule. The Israeli military commander in each area issued orders that effectively became the main source of law, alongside pre-existing Jordanian law in the West Bank and Egyptian administrative rules in Gaza, unless these were changed or suspended.

Within this framework, settlement policy developed through a dual legal system. Israeli settlers in the occupied territories are generally governed in personal matters and many civil issues by Israeli law, which is applied to them through military orders and Knesset legislation that extends Israeli jurisdiction to citizens beyond the Green Line. Palestinians living in the same geographic area are subject to military law and older local law, not Israeli civil law, unless a specific military order applies it.

Land for settlements is usually designated through administrative methods. Israeli authorities have used land declarations, such as classifying areas as “state land,” requisitioning land for “military or public needs,” or seizing land deemed “abandoned.” Often, land law from the Ottoman, British, and Jordanian periods is interpreted in ways that allow the military administration or the Israeli Civil Administration to register large areas as state property. This legal basis is then used to authorize settlement construction.

In East Jerusalem, which Israel unilaterally annexed and placed under full Israeli civilian law, settlement policy operates through municipal planning and zoning, land expropriations, and housing policies that favor Jewish neighborhoods. Palestinians in East Jerusalem usually hold a status of “permanent residents” rather than full citizenship, which interacts with planning rules to affect their ability to build homes compared with settlers.

Government Actors and Institutions

Settlement policy has involved a complex network of state bodies. The Ministry of Defense and the military, through the Civil Administration, control much of the land allocation and planning process in the West Bank. The Ministry of Construction and Housing, the Israel Land Authority, and at times the Ministry for Settlement Affairs participate in planning and funding new neighborhoods and infrastructure. Local and regional councils of settlers act as municipal authorities, receiving budgets from the central government.

Political parties that support settlement, often religious-nationalist or right-of-center, have pushed for budgets and legal changes that assist settlement growth. Governments that are more skeptical of settlements have at times frozen or slowed construction, but even then, bureaucratic momentum and local lobbying have often kept expansion going.

In addition to formal bodies, quasi-state institutions and non-state organizations have played crucial roles. The Jewish National Fund, the World Zionist Organization’s Settlement Division, and a variety of NGOs have helped acquire land, design plans, and support settlers on the ground. This mix of governmental, semi-governmental, and private actors creates what some scholars call a “settlement apparatus” that is larger than any single ministry.

Phases and Shifts in Settlement Strategy

Settlement policy has not been static. It evolved through distinct phases that reflected changing Israeli governments, regional conditions, and Palestinian and international responses.

In the early years after 1967, some settlements were presented as temporary security outposts, especially along strategic ridges and borders. The idea was that civilians living on hilltops or near armistice lines would help secure borders and deter attacks. At the same time, ideological movements like Gush Emunim, rooted in religious Zionism, began pushing for permanent Jewish presence in areas of the West Bank they saw as biblically central, such as Hebron and the heart of the historic region often called Judea and Samaria in Israeli discourse.

By the late 1970s and 1980s, under governments supporting settlement expansion, policy shifted toward a more systematic effort to create a lasting Jewish presence throughout key parts of the West Bank. New settlements were established not only near the Green Line but also deep inside the territory, sometimes organized into blocs intended to shape future borders and constrain Palestinian territorial continuity.

After the Oslo Accords, Israel divided the West Bank into Areas A, B, and C, with Area C under full Israeli control. Settlement policy increasingly focused on consolidating control over Area C, where almost all settlements are located. Even during periods labeled as “settlement freezes,” building inside existing settlements often continued through what was called “natural growth,” such as new housing units for expanding families.

At certain moments, policy shifted in the opposite direction. Israel removed its settlements from Sinai after the peace treaty with Egypt, and in 2005 carried out the Gaza Disengagement Plan, evacuating all settlers from the Gaza Strip and four small settlements in the northern West Bank. These withdrawals showed that the state could dismantle settlements when it decided to, though they were politically and socially costly within Israel and intensified internal debates about the future of other settlements.

Types of Settlements and Outposts

Within the framework of state policy, different forms of Jewish communities have appeared in the occupied territories. Officially recognized settlements are authorized by the government. They have approved master plans, legal municipal boundaries, and are connected to national infrastructure, including roads, water, electricity, and often public institutions such as schools and synagogues.

Many of these recognized settlements are located in designated blocs, such as Ma’ale Adumim near Jerusalem, Gush Etzion south of Jerusalem, Ariel in the northern West Bank, and others. Policies have often prioritized these blocs, which Israeli leaders frequently say they expect to keep under any future agreement.

Alongside recognized settlements there are “outposts,” which are built without formal government authorization. Some outposts begin as small clusters of caravans on hilltops near existing settlements, set up by activist settlers or youth movements. While initially portrayed as illegal even under Israeli law, many such outposts receive indirect state support, such as security protection, infrastructure connections, or subsidies, and over time some are retroactively legalized.

This pattern creates a dynamic where building begins in a semi-legal or illegal manner, and then official policy catches up and adjusts legal categories to incorporate the new reality. The distinction between authorized settlements and outposts thus constantly shifts. Outposts can serve as a tool of incremental expansion, testing political limits before formal approval.

Urban neighborhoods inside Jerusalem’s expanded municipal boundaries are another form of settlement. Israeli authorities typically describe these as “neighborhoods of Jerusalem” rather than settlements, but many of them are built beyond the Green Line on land annexed after 1967. Policy toward these areas involves urban planning decisions, transportation routes like light rail lines, and socio-economic incentives that encourage Israeli Jews to live there.

Incentives and Support Mechanisms

Settlement policy relies not only on legal and planning decisions but also on a range of incentives that make living in settlements more attractive to potential residents. Successive governments have declared many settlements to be “national priority areas,” which allows them to receive benefits such as tax breaks, housing subsidies, reduced land prices, and grants for local businesses.

Public investment in infrastructure is another powerful mechanism. The construction of bypass roads that connect settlements directly to Israel proper, often avoiding Palestinian towns and villages, shortens commute times and makes settlement life more practical for people working inside Israel. Road networks, public transportation, and security infrastructure, including fences and checkpoints, are planned in ways that integrate many settlements closely with the Israeli urban and economic system.

Public services also matter. Settlements often receive funding for schools, health clinics, cultural centers, and religious institutions. In some cases, middle class Israelis move to settlements not for ideological reasons but because housing is cheaper and public services are attractive compared to crowded cities inside Israel’s pre-1967 borders.

These incentives involve large budget allocations. Settlement policy therefore is not only a matter of land and law but also of public finance. Decisions on where to invest state resources directly shape the growth patterns of settlements and the demographic balance between Israelis and Palestinians in contested areas.

The Separation Barrier and Spatial Planning

One of the most influential tools in recent decades has been spatial planning on a regional scale, especially through the route of the separation barrier or wall that Israel began constructing in the early 2000s. Although officially justified as a security measure to prevent attacks, the barrier’s path often deviates from the Green Line and encloses certain settlement blocs on the Israeli side.

By surrounding some settlements with the barrier and connecting them through transportation corridors, the state effectively incorporates them into what many Israelis perceive as the country’s de facto territory. At the same time, the barrier cuts through Palestinian communities, separates farmers from their land, and creates enclaves. Settlement policy and barrier policy are closely intertwined, since each influences where people can live, move, and cultivate land.

Master plans and zoning regulations inside the West Bank also play a central role. Large parts of Area C are zoned as agricultural, nature reserves, or military firing zones. Palestinian construction in those zones is often restricted or denied through the permit system, while nearby settlement construction receives approval. The result is a pattern where Israeli communities expand, while Palestinian communities face demolition orders or are denied basic infrastructure like water connections.

This spatial structuring does not always follow a single clear blueprint, but over time it produces a map in which settlements dominate hilltops and key transportation routes, and Palestinian areas are fragmented into disconnected clusters of built-up land.

Domestic Politics and Ideological Drivers

Settlement policy is deeply influenced by internal Israeli politics and ideologies. For some Israelis, especially in parts of the religious Zionist camp, settling the West Bank is seen as a religious duty and a fulfillment of a historical or divine promise. For others, especially secular nationalists, settlements are instruments of security and bargaining power that ensure strategic depth and control over critical areas.

Political parties that draw support from settlers or religious-nationalist constituencies often seek control over ministries related to defense, education, and housing, where they can advance policies favorable to settlement. Coalition politics mean that smaller parties can sometimes exert outsized influence if they are necessary for a governing majority.

On the other hand, there are significant segments of Israeli society that oppose settlement expansion, either on moral grounds, due to its impact on Palestinians, or out of concern that it undermines the possibility of a two-state solution and threatens Israel’s future as both Jewish and democratic. NGOs, activists, and former officials critical of settlement policy monitor land use, bring court cases, and try to influence public debate.

The Israeli Supreme Court occasionally intervenes, especially in cases involving private Palestinian land where ownership is clearly documented. The court has sometimes ordered the dismantling or relocation of specific outposts or houses. However, it has generally accepted the broader framework of state power in the territories, and many rulings focus on technical legal questions rather than the larger political choice to maintain and expand settlements.

International Law and Diplomatic Context

From the perspective of most of the international community, Israeli settlements in the occupied territories, including East Jerusalem, are considered a violation of international humanitarian law, particularly the rule that an occupying power must not transfer parts of its own civilian population into territory it occupies. Israeli governments dispute this interpretation for various legal and historical reasons, but the disagreement has created ongoing diplomatic tension.

Settlement policy often becomes a focal point in relations between Israel and foreign governments. Criticism tends to increase when there are announcements of new settlement plans, especially in sensitive areas around Jerusalem or deep inside the West Bank. Some states have tried to pressure Israel through political statements, labeling rules for products from settlements, or threats of diplomatic consequences. Others maintain close ties with Israel and limit their criticism, or separate their security cooperation from disagreements over settlements.

International diplomatic initiatives that aim at a two-state solution usually envision some kind of compromise involving land swaps, where Israel would keep certain settlement blocs close to the Green Line in exchange for giving Palestinians equivalent land elsewhere. However, continued expansion, particularly in areas that fragment Palestinian territory, makes such arrangements harder to design and sell politically.

UN bodies, international courts, and human rights organizations regularly address settlement policy in reports and opinions. While these do not automatically change realities on the ground, they contribute to a broader narrative in which settlements are portrayed as a central structural obstacle to a negotiated political resolution.

Impact on Palestinian Communities and Governance

Settlement policy directly affects Palestinians’ access to land, water, movement, and governance. When land is classified as state land or allocated to a settlement, Palestinian villagers may lose farmland, grazing areas, or olive groves. Restrictions on building in Area C limit the ability of Palestinian communities to grow, repair homes, or build schools and clinics. Meanwhile, nearby settlements receive building permits and infrastructure for expansion.

Road networks and checkpoints designed to protect settlers and connect settlements to Israel often restrict Palestinian movement. Separate road systems, or sections where access is limited, can turn short trips into long detours. For Palestinians, daily life is shaped by the presence of settlements, the military units that protect them, and the legal environment that often favors settlers in disputes.

Palestinian governance is also shaped by settlement policy. The Palestinian Authority exercises limited self-rule mainly in Areas A and B, but has almost no control over land use in Area C, where many resources and strategic spaces lie. This division constrains economic development, infrastructure planning, and the creation of a contiguous Palestinian political entity.

In some areas, settlements and Palestinian towns are in close proximity, leading to frequent friction, disputes over land and roads, and incidents of violence. Israeli security policy in these areas is often oriented around protecting settlers, which in turn affects how Palestinians experience occupation in their daily encounters with soldiers, police, and checkpoints.

Settlement Policy and Future Political Scenarios

Settlement policy is not only about the present. It shapes possible futures. The spread and entrenchment of settlements are central to debates about whether a two-state solution remains feasible, whether alternative arrangements such as a single state or a confederation could emerge, and how borders and sovereignty might be organized.

If large numbers of settlers remain living inside territory that Palestinians claim for a future state, any partition would require either extensive land swaps, mass evacuation of settlers, or some form of shared sovereignty where settlers stay under Palestinian authority or a joint regime. Each of these options raises complex political, legal, and emotional challenges.

Policy choices made today about new housing units, outpost legalization, or infrastructure investments can either increase flexibility for future compromise or lock in patterns that are extremely difficult to reverse. Critics of settlement expansion argue that it is creating “facts on the ground” that will eventually determine political outcomes regardless of formal negotiations. Supporters often see the same facts on the ground as a way to secure long-term Israeli claims and presence.

Because of this, even seemingly technical decisions about zoning, building permits, or road building are followed closely by diplomats, analysts, and activists. Settlement policy, in its many detailed instruments, has become one of the main arenas where the long term trajectory of the conflict is being quietly shaped each day.