Israeli authorities are moving forward with plans to dramatically expand illegal settlements in the occupied West Bank, despite growing international condemnation and warnings that the move would destroy already moribund prospects for a two-state solution.

The Israeli government has set Wednesday as the date to discuss building thousands of new housing units in the E1 area, east of occupied East Jerusalem. The proposed expansion would link the large and illegal Ma’ale Adumim settlement with Jerusalem, effectively bisecting the West Bank and isolating Palestinian communities.

Israeli Prime Minister Benjamin Netanyahu’s far-right government also appears on the cusp of announcing its intention to occupy all of Gaza as its genocidal war on the besieged enclave rages on.

The E1 plan in the West Bank has long been criticised by the international community, including the European Union and successive United States administrations.

Israeli settlements in the West Bank and East Jerusalem are illegal under international law. The International Court of Justice, the top United Nations tribunal, reaffirmed that position last year, saying that Israel’s presence in the occupied Palestinian territories is unlawful and must end “as rapidly as possible”.

The plan would see nearly 1,214 hectares (3,000 acres) of Palestinian land stolen to build more than 4,000 settlement units, as well as hotels and roads connecting Ma’ale Adumim to West Jerusalem.

Palestinians say the project is part of broader efforts to “Judaise” East Jerusalem and entrench Israeli control over occupied territories in violation of international law.

Palestinian leaders seek the entirety of the West Bank, along with the Gaza Strip, and as a capital, East Jerusalem – areas Israel captured in the 1967 war – for their future state.

Currently, more than 500,000 settlers are living in the West Bank, and some 220,000 others in East Jerusalem.