Palestinians and the UN have criticised what an anti-settlement watchdog says is Israel’s largest seizure of land in the occupied West Bank in more than three decades.

About 12.7 sq km (4.9 sq miles) of the Jordan Valley was declared “state property” in June, denying Palestinians there private ownership and usage rights, according to the Peace Now group.

The declaration also created “territorial continuity” between Israeli settlements in a key corridor bordering Jordan, the group said.

A Palestinian official said the seizure was designed to dispossess Palestinians, while the UN criticised it as “a step in the wrong direction” for a two-state solution to the Israeli-Palestinian conflict.

The declaration was welcomed by Finance Minister Bezalel Smotrich – a far-right settler who has authority over settlement policies in the coalition government and who considers the West Bank as part of a “Greater Israel”.

Israel has built about 160 settlements housing some 700,000 Jews since it occupied the West Bank and East Jerusalem – land the Palestinians want as part of a future state – in the 1967 Middle East war.

The vast majority of the international community considers the settlements illegal under international law, although Israel disputes this.

The seizure approved by Israel’s Civil Administration last month – but only made public on Wednesday – covers an area north of the settlement of Yafit that had mostly been designated as a nature reserve or as an Israeli military “fire area”.

“The size of the area designated for declaration is the largest since the Oslo Accords,” Peace Now said, referring to the 1993 interim peace deal that set out how parts of the West Bank and Gaza would be governed by the Palestinian Authority until a permanent peace settlement could be reached.

The group added that 2024 “marks a peak in the extent of declarations of state land,” with a total of 23.7 sq km seized since the start of the year, including 8 sq km of land adjoining the latest area that is connected to the settlement of Masua.

Peace Now accused Mr Smotrich and Prime Minister Benjamin Netanyahu of being “determined to fight against the entire world and against the interests of the people of Israel for the benefit of a handful of settlers” over resolving Israel’s political crisis or ending the war in Gaza.

“Today, it is clear to everyone that this conflict cannot be resolved without a political settlement that establishes a Palestinian state alongside Israel,” it said.

When asked to comment, UN spokesperson Stephane Dujarric told reporters: “Frankly, it’s a step in the wrong direction. And the direction we want to be heading is to find a negotiated two-state solution.”

The head of the Palestinian Authority’s Wall and Settlement Resistance Commission, Muayyad Shaaban, meanwhile said the seizure was “part of a large plan aimed at controlling the eastern part of the West Bank”, according to the Wall Street Journal.

Israeli media reported that Mr Smotrich welcomed the declaration along with the news that the Israeli military’s Higher Planning Council was holding a two-day meeting to advance plans for 5,300 new settler homes in the West Bank, and the security cabinet’s decision last week to retroactively authorise five settlement outposts built without official government approval.

“Thank God, we are building and developing the settlements and thwarting the danger of a Palestinian state,” he was quoted as saying.

Last month, Peace Now released a taped recording of Mr Smotrich outlining in a speech to a conference for his Religious Zionism party a series of moves that the campaign group warned would irreversibly change the way the West Bank was governed and lead to “de facto annexation”.

It said they included the completion of transferring the management of settlements from the military to civilian officials; the creation of a “legalisation bypass route” for settlement outposts; expanding the authorisation of agricultural outposts; and cracking down on unauthorised Palestinian construction.

In return for the retroactive authorisation of the five settlement outposts, Mr Smotrich reportedly agreed to unfreeze the last three months of tax revenues withheld from the Palestinian Authority and to extend a waiver protecting Israeli banks that work with Palestinian banks.

The US had urged Israel to release the funds, warning that further economic hardship for Palestinians could lead to more violence in the West Bank.

The UN says more than 530 Palestinians and 14 Israelis have been killed in the territory since the start of the war in Gaza, which was triggered by Hamas’s deadly attack on southern Israel on 7 October.