Israel’s far-right finance minister says a contentious new settlement construction in the Israeli-occupied West Bank is going ahead, a project that Palestinians and rights groups worry will scuttle plans for a future Palestinian state by effectively cutting the West Bank into two separate parts.

Israel said Thursday it was moving forward with controversial plans to build thousands of new housing units in the occupied West Bank, a development far-right Finance Minister Bezalel Smotrich said would “permanently bury the idea of a Palestinian state.

An Israel Defense Ministry planning committee gave approval Wednesday to a controversial settlement plan that would effectively split the West Bank in two.