A contentious bill sponsored by right-wing Jewish Home party legislator Bezalel Smotrich was signed into law on Thursday, over the objection of opposition lawmakers, who claimed it aimed to deceive the US and channel funds to illegal settlement outposts in the West Bank.

The legislation, approved by 53 to 48 votes with one abstention, anchors in law the status of the World Zionist Organization’s Settlement Division as a recognized arm of the government with the power — subject to government oversight — to fund and develop rural Jewish communities both within and over the Green Line.

For nearly half a century, the Settlement Division has played a key role in managing land and infrastructure. The group’s stated aim is to create and support rural communities in the West Bank, Golan Heights and Israel.

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The new law allows the government to delegate authority to the Division to transfer funds to communities and settlements in an orderly fashion, to publish tenders and to budget, oversee and provide support for development projects.

Yair Lapid, head of the opposition Yesh Atid party, linked the bill to the video released Wednesday in which far-right wedding revelers could be seen repeatedly stabbing a picture of the Palestinian baby Ali Dawabsha, who was burned to death along with his parents in an arson attack in the West Bank on July 31.

“It’s time that we came out against the extremism of this blood wedding which was born in the same outposts that this bill is trying to fund,” Lapid said during a Knesset plenum deliberation ahead of the vote.

“Earlier on, we saw the dance of blood. These people are not Jews and we have to fight them just like we fight Hamas and Hezbollah,” he continued. “They did not materialize out of thin air; they have rabbis and an ideology. It’s time we came out against the extremism of this blood wedding, which was born in the same outposts that this bill is trying to fund.”

Lapid accused Smotrich’s Jewish Home party of putting its interests before those of the country and said the law was “for [the settlement of] Itamar and the illegal outposts and for all the places where the [Settlement] Division is not building but is trying to establish a political reality.” The main settlement blocs of Maaleh Adumim, Gush Etzion and Ariel, which Israel intends to retain even after a peace deal with the Palestinians, would suffer as a result, he charged.

“This bill is designed to deceive America,” the Zionist Union’s MK Tzipi Livni said. “The government is, in effect, transferring authority to the Division but not the obligations.” She said she would accept the legislation if it specified that the Settlement Division was subject to the same obligations as the government, “but of course, that wasn’t accepted.”

“My Judaism is not about hatred and fire and dancing with the blood of babies,” she said, claiming that the legislation would support “the same group.”

“Today, it was clarified that despite perceptions among Israel’s left, which rejects outright the idea of settlements, Zionism has won,” said Smotrich, the bill’s sponsor. “During the struggle of the last few months, the forces in the Knesset that have tired of Zionism came together to bring down this law. Today, despite that, Zionism has won.”

The new law extends to the Settlement Division existing laws pertaining to freedom of information and the publication of tenders, going some way to meeting opposition criticism about a lack of transparency that has enabled the transfer of disproportionate funding for West Bank settlements.

A year ago, after the Knesset voted overwhelmingly to dissolve itself, members of the Finance Committee issued a series of last-minute public funds transfers, among them an allocation of NIS 112 million ($28.5 million) to the Settlement Division.

In March, Haaretz cited Finance Ministry figures as saying the Settlement Division had transferred at least 55 million shekels (about $14 million) in 2014, significantly more than the 17 million shekels ($4.2 million) which WZO management had reported for that year. In July this year, Haaretz reported that the government had forgiven nearly $100 million in loans to communities in the Golan Heights and Jewish settlements.