Netanyahu’s vow to block creation of Palestinian state sets stage for a widening diplomatic crisis

Israeli Prime Minister Benjamin Netanyahu has threatened that there will be no Palestinian state west of the Jordan River. His uncompromising verdict on the future of the region came as a direct response to the decision by three of Israel’s closest intelligence allies, the UK, Canada and Australia, to formally recognise a Palestinian state yesterday.

The Israeli PM says international recognition of Palestine at this time amounts to an absurd prize for terrorism. He and his allies contend that the growing momentum towards recognition is the fruit of the October 7 massacre committed by Hamas. Israeli officials argue that such recognition endangers Israel’s existence and rewards jihadist ideology. The recognising nations, including the UK, presented their decision as an attempt to revive hope for peace and preserve the two-state solution. The Israeli government, however, insists that the two-state paradigm is defunct.

Netanyahu stressed that he had for years prevented the establishment of what he described as a terrorist state. His government has already taken steps to make Palestinian sovereignty increasingly impossible on the ground. He hinted at retaliatory measures in response to what he called an effort to force a terror state on Israel in the heart of its land. He said details of the response would be given after his return from the United States, where he is due to attend the UN General Assembly.

The exact nature of the response is yet to be seen, but Netanyahu has already moved in ways that contradict the intentions of the recognising states. He declared that Jewish settlement in Judea and Samaria had been doubled and that this expansion would continue. It has left the West Bank all but formally annexed, with settlements spreading at an unprecedented pace.

The government’s determination is visible in the highly contentious E1 settlement project between Jerusalem and Ma’ale Adumim. Netanyahu’s remarks were delivered at a ceremony marking the expansion of this project, which, if completed, would divide the Palestinian-controlled areas of the West Bank in two. Far-right ministers in his cabinet have pressed for even more aggressive measures. National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich have demanded full annexation of the West Bank. Smotrich urged sovereignty over what he called the historic homeland of the Jewish people in Judea and Samaria, and the permanent removal of the idea of a Palestinian state from the political agenda.

The international recognition of Palestine was intended to signal that the possibility of peace remained alive, yet it has deepened global divisions. The move risks undermining initiatives such as the Abraham Accords and could prompt a reassessment of ties with Arab states, including the United Arab Emirates, which has called West Bank annexation a red line.

Netanyahu feels emboldened by the backing of the Trump administration. Secretary of State Marco Rubio has warned allies that recognition would be counterproductive, but Washington has nevertheless provided what Israeli officials describe as a blanket of diplomatic protection. This support gives Netanyahu the freedom to act with little concern over immediate international reprisals, despite European disapproval.

For leaders such as British Prime Minister Keir Starmer, recognition was a final attempt to keep the two-state vision viable. Starmer argued that without action, there would soon be nothing left to recognise. Within Israel, however, opposition voices accuse Netanyahu of political failure. Opposition leader Yair Golan said the unilateral recognition by allies was a grave failure of Netanyahu and Smotrich, who he claimed had chosen occupation and annexation rather than an end to the war.

Netanyahu’s vow to prevent the creation of a Palestinian state west of the Jordan River has therefore set the stage for a widening diplomatic crisis. His government is intent on eliminating the two-state solution, while allies abroad are trying, at least symbolically, to keep it alive. The clash reflects a decisive moment for both Israel’s regional position and the international order that has long sought peace through partition.