The Israeli ultra nationalist quietly reshaping the West Bank

On Wednesday, Smotrich—who is Israel’s finance minister—celebrated his most recent achievement: The creation of municipal boundaries to build a new Jewish settlement that will connect a major West Bank settlement bloc with Jerusalem.

The new settlement, named Nahal Heletz, will be built inside land designated as a Unesco World Heritage site in 2014.

The move is part of a strategy by Israeli settlers to cut off Palestinian towns in the West Bank from East Jerusalem, chipping away at the possibility that East Jerusalem could one day be the capital of an independent Palestinian state.

“We will continue to fight the dangerous idea of a Palestinian state and to create facts on the ground," Smotrich said on Wednesday, celebrating the decision by offices under his control to advance the new settlement. “This is my life’s goal, and God willing, I’ll continue with it as much as I can."

Smotrich came to power in late 2022 when his far-right Religious Zionist Party helped Prime Minister Benjamin Netanyahu win a thin parliamentary majority. Using his new leverage to win dual posts as finance minister and a minister in the Defense Ministry, Smotrich gained influence over policy in the West Bank, and is rapidly deploying his sway to reshape the territory.

Since he came to office, Palestinian and Israeli watchdog organizations say land seizures, building permits and illegal outposts in the West Bank have increased. Demolitions of Palestinian homes have risen too.

An aide for Smotrich said annexation of the West Bank wasn’t the aim and that improvements to infrastructure benefit Palestinians too.

As finance minister, Smotrich has directed hundreds of millions of taxpayer dollars toward upgrading infrastructure in the territory. In the Defense Ministry, he has replaced military institutions that have long overseen Israel’s occupation with civilian ones that are better equipped to handle things such as water, road construction and building permits.

“The goal is to change the DNA of the system for many, many years," Smotrich said of his plans in the West Bank, according to a June recording released by anti-settlement Israeli activists and verified by The Wall Street Journal. The ultimate aim, he said, was to tighten Israeli control of the West Bank—and close off the possibility of a Palestinian state—while avoiding international attention.

The changes Smotrich is making could lay the groundwork for Israeli sovereignty over the West Bank in all but name, changes that are too in the weeds of government policy for most people to follow.

“It is way too bureaucratic, regulatory and detailed for the general public," said Yohanan Plesner, a former centrist member of Israel’s parliament and president of the Israel Democracy Institute think tank in Jerusalem.

In June, at Smotrich’s request, Israel’s government authorized the building of Nahal Heletz and four other settlements. In an apparent quid pro quo, Smotrich also agreed to unfreeze tax revenue that Israel collects on behalf of the Palestinian Authority, which governs most Palestinians in the West Bank, which was held back after the Oct. 7 attacks.

For years, Israel has maintained that its control of the West Bank is a temporary military occupation run by the army, not a permanent annexation under civilian control. The territory’s final status, Israel said, would be part of a negotiated settlement with Palestinians.

But Smotrich has overseen the creation of a civilian body called the Settlements Administration with sweeping authority over civilian issues, including appropriating West Bank land, approving settlement expansion and issuing permits for construction.

The changes have paved the way for the designation of nearly 6,000 acres in the West Bank as state land, a precursor for future settlements in those areas. So far this year, more land has been seized than in all of the past three decades, Israeli settlement watchdog Peace Now said. Thousands of kilometers of roads have been built, extending their reach deeper into the territory.

Under Smotrich, Israel’s 2024 budget allocated about $960 million, or 25% of the Transportation Ministry’s budget for road infrastructure, for improving the road network in the West Bank. There are nearly 500,000 settlers in the West Bank, out of the nearly 10 million Israeli citizens. For Israeli settlers, being under civilian control like their compatriots inside Israel’s settled frontiers, simplifies everything from getting building permits to expanding roads. But for Palestinians, it entrenches Israeli rule and makes the dream of a future state less likely.

Naomi Kahn, a Jewish settler, said her daily commute to work has been slashed by over an hour after a nearby road was expanded at the end of 2023.

A major road that cuts through Jewish settlements north of Ramallah had street lamps installed for the first time this year, said Yisrael Ganz, chairman of Yesha Council, an umbrella organization that represents settlements in the West Bank.

While the changes seem inconsequential, they are an early sign of an improving quality of life in Israeli settlements, which could lure more Israelis to move there and marginalize Palestinians even further.

Muayad Shaaban, a minister with the Palestinian Authority which administers part of the West Bank, said the changes amount to creeping annexation.

The goal is to increase the territory controlled by Israeli settlers, he added, while shrinking the parts of the West Bank accessible to Palestinians.

Smotrich’s critics and admirers agree that he is an unusually effective bureaucrat, combining political power with a deep knowledge of the nuts-and-bolts of governance.

Since early 2023, the total number of illegal settler outposts has grown to about 200, a 25% increase from the year before, according to Hagit Ofran, who tracks settlement growth for Peace Now. In that time, the Israeli government has started the approval process for 20,000 new homes in the West Bank, compared with 8,000 in the two years from 2021 to 2022, the group said.

“We’re building up our good land and preventing the establishment of a Palestinian state," Smotrich wrote on X at the start of July after the announcement of 6,000 new homes in the territory.

Jewish settlements in the West Bank are considered illegal by much of the international community, although Israel disputes this.

Smotrich started out as a young right-wing activist during Israel’s disengagement from Gaza in the early 2000s. Israel’s domestic security service, the Shin Bet, detained him in 2005 after officers found him and other activists in possession of 700 liters of gasoline and oil, according to Dvir Kariv, a former Shin Bet agent who detained Smotrich. He was held for three weeks, but was released without being charged. Smotrich’s office disputed parts of that account and said he was only accused of blocking a road and organizing illegal demonstrations.

Before entering politics, he co-founded Regavim, a pro-settler group that tracks and protests illegal Palestinian building in the West Bank and southern Israel. Smotrich filed petition after petition lobbying for the demolition of Palestinian homes and structures, analysts said. That gave him a solid grounding in the complex web of Ottoman, British, Jordanian and military law that undergirds the West Bank.

In 2015, he won a seat in the Knesset, Israel’s parliament, and later served stints as transportation minister and a member of a high-level security cabinet.

His recent elevation in government shows the growing political strength of Israel’s religious ultranationalist Jews, many of whom view the land as given to the Jewish people by God. Relatively few in number, they now wield disproportionate power through their alliance with Netanyahu.

Palestinians have, since the start of the Gaza war, reported an uptick in harassment by settlers.

Mohammad Ishtaye, a 48-year-old Palestinian farmer, said that Jewish settlers have become increasingly brazen in the past 10 months. They have sped up construction, barred Palestinians from accessing their own farms and blocked the main entrance to the city of Salfit where he lives. He said he has been attacked by settlers and received death threats when trying to farm his plot.

In the recorded speech to settlers, Smotrich said the government has kept West Bank oversight within the Defense Ministry to give the impression that the military is still in control.

“It will make it easier to swallow in the international and legal context so they won’t say we are doing annexation," he said.

Write to Shan Li at shan.li@wsj.com and Dov Lieber at dov.lieber@wsj.com