Israel gave final approval for a settlement project in the occupied West Bank that would effectively cut the territory in two, which Palestinians say could dash hopes for a future Palestinian state.

L ONDON -- A controversial Israeli settlement plan that would effectively split the West Bank in two is gaining momentum after a key government committee -- the Higher Planning Committee of the Civil Administration under the Defense Ministry -- gave its approval.

At the heart of the controversy is the viability of a Palestinian state. Israeli construction in E1 would cut the West Bank into two separate parts, rendering it impossible to establish a contiguous Palestinian state with East Jerusalem as its capital.