The Israeli parliament on Monday finalised a controversial law legalising dozens of Jewish outposts built on private Palestinian land in the occupied West Bank.
The law – approved by 60 members of parliament to 52 against –was slammed by the Palestinians as a means to "legalise theft" of land.
It will allow Israel to legally seize Palestinian private land that was occupied during the 1967 Middle East war.
The move comes as Israeli authorities forcefully removed Jewish settlers from the illegal Amona outpost following a Supreme Court order.
International law considers all settlements to be illegal, but Israel distinguishes between those it sanctions and those it does not, dubbed outposts.
The law applies to over 50 outposts and homes within existing settlements built on land owned by Palestinians, according to the anti-settlement organisation Peace Now.
More than 3,800 homes would be "legalised", the NGO said.
The Palestine Liberation Organisation said the law demonstrated "the Israeli government's will to destroy any chances for a political solution."
A PLO statement stressed that the "Israeli settlement enterprise negates peace and the possibility of the two-state solution."
Challenges for the law
Opposition chief and Labour leader Isaac Herzog had lashed out against the "despicable law" that he said would undermine the country's Jewish majority.
The law is seen by critics as promoting at least partial annexation of the West Bank, a key demand for parts of Netanyahu's right-wing cabinet, including Jewish Home.
Human Rights Watch said the law "reflects Israel's manifest disregard of international law" and deepens the "de facto permanent occupation" of the West Bank.
It warned that "the Trump administration cannot shield them from the scrutiny of the International Criminal Court".
Israeli rights group B'Tselem said the law proved Israel "has no intention of ending its control over the Palestinians or its theft of their land."
The bill could still be challenged, with Defence Minister Avigdor Lieberman saying last week: "The chance that it will be struck down by the Supreme Court is 100 percent."
UN envoy for the Middle East peace process Nickolay Mladenov said ahead of the Monday vote he was "concerned" by the law, which could "greatly diminish the prospects for Arab-Israeli peace."
Israeli Attorney General Avichai Mandelblit has warned the government that the law could be unconstitutional and risks exposing Israel to international prosecution for war crimes.
Israeli Prime Minister Benjamin Netanyahu, who did not participate in the law's final votes since he was returning from a trip to Britain, said he had "updated" the US administration so as not to surprise "our friends".
Bezalel Smotrich of the far-right Jewish Home party, who was one of the forces behind the legislation, thanked the American people for electing Donald Trump as president, "without whom the law would have probably not passed".
Since Trump's inauguration, Israel has announced more than 6,000 new homes in the West Bank and east Jerusalem, seen as key parts of any future Palestinian state.
For the first time last week Trump's administration said settlement expansion "may not be helpful" for peace prospects, but also broke with previous administrations by saying settlements were not an obstacle to peace.
The White House statement was interpreted as a message to Netanyahu and his government that the US administration intended to reserve its options.
Netanyahu's political maneuver
Netanyahu privately opposes the bill over concerns it could provide grounds for prosecution by the International Criminal Court in The Hague, according to Reuters.
But the far-right Jewish Home party, a member of the coalition looking to draw voters from the traditional base of Netanyahu's Likud, pushed for the legislation after the forced evacuation of 330 settlers last week from Amona outpost.
With Netanyahu under police investigation on suspicion of abuse of office, an allegation he denies, Likud has been slipping in opinion polls. Opposing the law would have risked alienating his supporters and ceding ground to Jewish Home.