The diplomatic-security cabinet on Tuesday unanimously approved Prime Minister Benjamin Netanyahu's plan to build 700 housing units for Palestinians in Area C in Judea and Samaria.
Area C is entirely under Israel's security control.
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Transportation Minister Bezalel Smotrich (National Union) and Education Minister Rafi Peretz (Habayit Hayehudi) both supported the plan. Smotrich and Environmental Protection Minister Zeev Elkin, meanwhile, demanded that the plan include a stipulating that the country would plan the construction, and not the Palestinian Authority, due to humanitarian concerns.
Lengthy discussions had been held in recent days on the matter, amid concerns that the controversial program would raise the ire of right-wing leaders such as Smotrich, who opposes a future Palestinian state in the West Bank and Gaza Strip.
The development comes just days before an expected visit to Jerusalem by senior White House adviser Jared Kushner, who is the lead architect of the Trump administration's Mideast peace plan.
Senior officials in the Netanyahu government told Kan News that the plan is an "extremely sensitive" matter, but refused to comment on whether Netanyahu's construction proposal is connected with the peace plan or Kushner's upcoming visit.
A delegation of senior US officials, led by Kushner and White House special envoy Jason Greenblatt, are set to visit the Middle East in the coming days where they are expected to make stops in Israel and Saudi Arabia.
The delegation is also expected to lobby for US President Donald Trump's peace plan in Egypt and Jordan.
"For the first time, the State of Israel will make sure that in Area C, there will only be construction for the Arabs who were original residents of the area since 1994 (Oslo B) and not Arabs who came later from Areas A and B," Smotrich said in a Facebook post. "For the first time, the State of Israel will determine in a clear and unmistakable manner that original inhabitants of the area will be able to build and develop only in places that don't harm the settlement enterprise and security, and don't create territorial contiguity or a de facto Palestinian state. Places that don't serve the national interests of the Arabs, rather the national strategic interests of the State of Israel."
He continued: "For the first time ever, the State of Israel will implement its sovereignty over the entire territory and take responsibility for what happens inside it. Gone are the days of construction plans pushed by the PA that serve its interests. For the first time, the State of Israel will create a tool basket for real [law] enforcement that will be enacted to neutralize the Palestinian takeover plan."
