Israel on Wednesday gave final approval for a long-disputed settlement project in the occupied West Bank, a move that Palestinians and rights groups warn could split the territory in two and deal a devastating blow to prospects for a future Palestinian state.

Settlement development in E1, an open tract of land east of Jerusalem, has been under consideration for more than two decades, but was frozen due to U.S. pressure during previous administrations. Palestinians and rights groups say that if the proposals go ahead it could destroy hopes for a future Palestinian state.

Construction in E1 is expected to begin immediately, while Ashahel’s plan reaches the deposit stage, a key step toward final approval. Israel’s Civil Administration approved major construction projects in West Bank,