The Donald Trump administration on Monday (local time) announced that the US no longer regards Israeli settlements in the West Bank as illegal or violating international law.
The Policy decision was announced by the US Secretary of State Mike Pompeo.
"After carefully studying all sides of the legal debate, this administration agrees with President Reagan. The establishment of Israeli civilian settlements in the West Bank is not per se inconsistent with international law," Jerusalem Post quoted Pompeo as saying.
The announcement is a departure from the decision during the Obama administration that they did violate international law.
According to Sputnik, the "the settlements are home to more than 600,000 Israelis, who live mostly in settlements scattered across the territories, which Israel seized from Jordan in 1967" during the Six-Day War.
However, Pompeo also clarified that the US was also not prejudging the ultimate status of the West Bank.
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"The hard truth is that there will never be a judicial resolution to the conflict and arguments about who is right and who is wrong as a matter of international law will not bring peace. This is a complex political problem that can only be solved by negotiations between Israelis and Palestinian," the US Secretary of State was quoted as saying.
Pompeo said calling the establishment of settlement inconsistent with international law has not worked and that "it cannot bring peace."
The move was welcomed in Israel with Prime Minister Benjamin Netanyahu terming it as correction of a historical wrong.
"Today, the United States adopted an important policy that rights a historical wrong when the Trump administration clearly rejected the false claim that Israeli settlements in Judea and Samaria are inherently illegal under international law," Netanyahu's office was quoted as saying in a statement by The Times of Israel.
The move was criticised by Palestinian Authority senior negotiator Saeb Erekat who slammed the US policy change on West Bank settlements.
"International law and system clearly define the illegality of all Israeli settlements, including by the International Court of Justice, the UN Security Council, and the International Committee of the Red Cross. Israel's colonial-settlement enterprise perpetuates the negation of the Palestinian right to self-determination," he said.
It was also rejected by the European Union with a spokesperson for the group saying that "its position on Israeli settlement policy in the occupied Palestinian territory is clear and remains unchanged: all settlement activity is illegal under international law and it erodes the viability of the two-state solution and the prospects for lasting peace."
The Trump administration had previously recognised Jerusalem as Israel's capital.