U.S. Secretary of State Mike Pompeo announced a reversal in American policy on Israeli settlements in the West Bank, arguing that they "are not, per se, inconsistent with international law".
Pompeo's statement represents a stark policy shift from previous American administrations, including that of Barack Obama, which considered Israel's construction of settlements in the West Bank - which Israel has occupied since 1967 - illegal and an obstacle to a lasting peace deal.
The decision has provoked fury from the Palestinians, with senior official Saeb Erekat accusing President Donald Trump of choosing "the law of the jungle" over international law. Hanan Ashwari, another prominent Palestinian diplomat, called the decision a "blow to justice and peace."
But it could serve as a lifeline for embattled Israeli Prime Minister Benjamin Netanyahu, who is fighting to remain in power after two inconclusive elections this year.
On Twitter, Netanyahu said the US decision "rights a historical wrong," and called on other countries to take a similar stance.
Israel seized the West Bank and Gaza from Jordan and Egypt after the 1967 Six Day War. Although settlements in Gaza were finally dismantled in 2005, settlements in the West Bank have grown, with some like Ariel, near Nablus, now sizable towns of tens of thousands of residents.
Elsewhere, such as in the Palestinian quarters of Jerusalem and in Hebron, in the West Bank, Israeli settlements exist within the city centre.
Israeli settlements have long been considered one of the key stumbling blocks for a final peace deal between Israel and the Palestinians, with the latter arguing that Israel would need to dismantle all its settlements in the West Bank, which would form the bulk of a future Palestinian state.
But the settlement movement is a significant political force, particularly for Netanyahu, who has relied on its support to maintain his series of right wing coalitions over the past two decades.
On Monday, Pompeo argued that U.S. policy on settlements in the West Bank had been inconsistent: while Democrat President Jimmy Carter in 1978 found that they were not consistent with international law, Republican President Ronald Reagan in 1981 said he did not view them as inherently illegal.
"The establishment of Israeli civilian settlements is not, per se, inconsistent with international law," Pompeo told reporters at the State Department.
The decision is likely to inflame opinion in the Arab world, with Jordanian Foreign Minister Ayman Safadi warning of "dangerous consequences." The U.S. State Department on Monday warned U.S. citizens in the MIddle East of possible reprisals after the announcement.
European leaders have also condemned the decision. EU High Representative for Foreign and Security Policy Federica Mogherini said in a statement that the bloc's position on the settlements remained unchanged.
"All settlement activity is illegal under international law and it erodes the viability of the two-state solution and the prospects for lasting peace, as reaffirmed by UN Security Council Resolution 2334," the statement said.
"The EU calls on Israel to end all settlement activity, in line with its obligations as an occupying power."
Hugh Lovatt, a policy fellow with the Middle East and North Africa program at the European Council on Foreign Relations, told Euronews that the decision will undermine the international rules-based system that it itself helped to put in place.
But it will also increase the likelihood that a Netanyahu government will move to annex the West Bank settlements.
"How could any Israeli government not embrace annexation when presented with such an open invitation?" he said.
Third major decision
Pompeo's announcement is the third time that the Trump administration has reversed convention over Israel and the Palestinian Territories since the 2016 election. In 2017 Trump recognised Jerusalem as the capital of Israel and, in 2018, the United States formally opened an embassy in the city.
Jerusalem is claimed as a capital by both the Israelis and the Palestinians.
And in March, Trump recognised Israel's 1981 annexation of the Golan Heights from Syria, in another boost for Netanyahu.
The US embassy in Jerusalem on Monday warned Americans about travelling in Jerusalem, the West Bank and Gaza, soon after Secretary of State Mike Pompeo announced the United States was softening its position on Israel's Jewish settlements.
"The US Embassy advises citizens in or considering travel to or through Jerusalem, the West Bank, or Gaza to maintain a high level of vigilance and take appropriate steps to increase their security awareness in light of the current environment," it said in a statement.
"Individuals and groups opposed to the Secretary of State's recent announcement may target US government."