Israel’s Housing Ministry is working on plans for thousands of residential units in the controversial E1 area of the West Bank, according to a new report by the anti-settlement Peace Now organization.

The report, issued Monday, says that the ministry “is quietly working on” plans to develop 8,372 new units in the 12-square kilometer area of land, which is located between Jerusalem and the settlement of Ma’ale Adumim, and within the municipal jurisdiction of the latter.

Israel’s housing minister said Monday there were no such plans.

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According to the data provided by Peace Now, the Housing Ministry quietly paid NIS 3.6 million ($930,000) to the Ma’ale Adumim council to plan three new neighborhoods to be called Mevasseret Adumim, without a public tender that would have drawn international opposition.

“The area of Ma’ale Adumim and E1 is one of the most sensitive areas in terms of the chances for two state solution,” Peace Now wrote. “For these reasons, whenever an Israeli leader tries to promote the plans in E1, the international community strongly condemns them.”

Peace Now claims the ministry paid NIS 1.5 million ($385,000) to complete detailed planning for 1,000 units in Mevasseret Adumim South, NIS 1.8 million ($465,000) for a plan for 2,000 units for Mevasseret Adumim East, and NIS 300,000 ($77,000) to test the feasibility of constructing 1,000 housing units in Mevasseret Adumim North.

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The nonprofit organization, which campaigns for a negotiated two-state agreement between Israel and the Palestinians, largely bases the claims on 200 pages of Housing Ministry documentation, with tables containing more than 1,000 lines of data, obtained following a request under Freedom of Information Act.

Housing Construction Minister Yoav Galant (Kulanu) denied the claims Monday, telling Army Radio that “there is no planning and no preparation for planning in that area.”

In all, the Peace Now report claims the government is planning 55,548 housing units in West Bank settlements, including the E1 building, 78% of which lie to the east of the West Bank security barrier.

Successive Israeli governments have considered building in E1 to establish “facts on the ground” and ensure that Ma’ale Adumim, with a population of around 40,000, remains linked to Jerusalem rather than isolated as a Jewish enclave, if and when a Palestinian state arises.

Attempts to build have, however, met with stiff international opposition.

Palestinians claim a new neighborhood in E1 would ruin the chances for a Palestinian metropolis between Ramallah and Bethlehem, also connected to East Jerusalem, scuppering Palestinian efforts to create territorial contiguity between the northern and southern parts of the West Bank. Earlier E1 construction plans were frozen by Ariel Sharon’s government in 2005.

In October 2013, the Housing Ministry — then controlled by Uri Ariel of the pro-settlement Jewish Home party — issued tenders for the planning of tens of thousands of housing units in West Bank settlements, including, among others, thousands of units in E1 and in E2 (Givat Eitam, south of Bethlehem), Peace Now said.

International uproar over the tenders prompted Prime Minister Benjamin Netanyahu to cancel the moves in November of that year. But one year later, Peace Now says after obtaining Housing Ministry documents, the ministry — without tenders — hired architects to work on many of the plans that had been canceled, including in E1, E2, Nokdim (south of Bethlehem), Tekoa (northeast of Hebron) and Ma’ale Amos (near Tekoa).

“This planning, which contradicts any possible commitment to a two-state solution, continues through the present day,” the Peace Now report says.

The international community regards as illegal all settlements in lands conquered by Israel during the 1967 Six Day war and has backed Palestinian claims that continued construction in these areas presents a major stumbling block to an Israeli-Palestinian peace agreement.