JERUSALEM—Israel granted a West Bank college coveted university status on Monday, in a move that could trigger international condemnation and enrage the Palestinians.

Defense Minister Ehud Barak said that following a legal review, he instructed the military to upgrade the college's status, the final approval for the designation.

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The announcement marks a victory for nationalist settlers who hope university recognition will give them further legitimacy and a stronger sense of permanence in the West Bank.

Prime Minister Benjamin Netanyahu, whose government backed the upgrade, called the institute's president to congratulate him following the decision.

“This is an additional boost to higher education in Israel,” he said in a statement.

Proponents of the upgrade say the new status marks a crowning jewel of the government's commitment to holding the West Bank, the heartland of biblical Judaism, captured by Israel in the 1967 Mideast war.

Palestinians consider the West Bank to be part of their future state. Most of the international community agrees and considers Israel's West Bank settlements illegal and an obstacle to peace.

Israel's council of higher education previously voted against the upgrade, citing academic, not political reasons. It said there was no justification for another university in Israel when others were already suffering from a shortage in faculty and research infrastructure.

Opponents fear the decision could politicize Israel's vaunted higher education system and perhaps jeopardize international funding, staff and research exchanges. The spectre of an international boycott also looms.

Some 19,000 Jewish settlers live in Ariel. Positioned deep in the West Bank, its removal is seen by pro-Palestinian activists as essential to the viability of a future Palestinian state, since annexing it to Israel would also take a significant wedge of land with it to connect with Israel proper.

The Ariel institution has operated for 30 years in some form, ultimately growing into a college of some 12,500 students. It is open to all Israeli citizens, including Arabs. But like other Israeli universities, it is closed to the 2.5 million Palestinians in the West Bank.