Last month, Palestine was granted
the status of "non-member observer state" by the United Nations, despite the objections of Israel and other countries. In response, Israel is moving ahead
with plans to build some 3,500 settlement homes in an area of the West Bank known as E-1. If the plans move forward, this would effectively cut off the West Bank from East Jerusalem - which is where the Palestinians hope to have their capital - and create a chokepoint between the northern and southern portions of the West Bank.
Many nations have strongly condemned the move, and Iceland is no exception. Vísir
reports that Minister of Foreign Affairs Össur Skarphéðinsson has condemned the proposed settlement housing.
"With this behaviour, Israel is punishing the Palestinians for taking a step in the direction of a two-state solution," he told reporters. "A solution Israel has said they support. The consequences for these actions can be none other than doing damage to the possibility of a two-state solution."
The settlements themselves are considered by the UN to be a violation of international law. Israeli Cabinet Minister Uzi Landau has responded
to the international criticism, saying, "We don't tell the British or the French where to build in Paris or London and we do not expect anybody to tell us what to do in Jerusalem."
Iceland's Minister of Foreign Affairs said Israel was "punishing" Palestine for attaining symbolic statehood by building settlements which are likely to only increase tensions in the area.