Israel’s decision to invite bids for the construction of more than 1,200 homes in the long-disputed E1 area of the occupied West Bank has drawn fresh international criticism.Several countries have warned that the project could make the creation of a future Palestinian state even more difficult.So, what is E1 and why does it matter?What is E1E1, short for “East 1”, is an area east of Jerusalem, between East Jerusalem and the large Israeli settlement of Ma’ale Adumim.Israel has wanted to develop the area for years, but the plan has repeatedly faced international opposition and delays.The latest tenders cover 1,234 housing units, part of a larger plan for about 3,400 homes.Why is E1 so importantThe answer lies in its location.E1 sits at a key point in the West Bank, between Jerusalem and Ma’ale Adumim. The area is important because it lies along a potential route connecting the northern and southern parts of the West Bank.Critics fear that large-scale settlement construction in E1 could create a continuous Israeli-controlled built-up area between Jerusalem and Ma’ale Adumim.This could make movement between Palestinian communities more difficult and further separate East Jerusalem from Palestinian areas to its east.That is why Palestinians and many countries see the E1 project as a serious threat to the two-state solution — the idea of an independent Palestinian state existing alongside Israel.What has Israel done nowThe latest move is significant because it takes the project beyond planning.Israel has published construction tenders, allowing companies to bid for the work. The tender for the 1,234 homes was opened on August 18, with bids due in October.For years, the E1 project has largely remained stalled. The publication of tenders raises the prospect that construction could now move ahead.How has the world reactedBritain, France, Germany and Italy have called the project “unacceptable” and urged Israel to withdraw the plans.The four countries warned that the development could “drive a wedge through the West Bank” and undermine the territorial continuity needed for a future Palestinian state.They have also urged businesses not to bid for the project, citing possible legal and reputational risks.Other countries, including Canada, the Netherlands and Norway, have also opposed the E1 plans.Why is there a legal disputeMost of the international community considers Israeli settlements in the West Bank, which Israel captured in the 1967 war, violate the international law.Israel rejects that position and disputes the legal characterisation of its settlements and its presence in the territory.The E1 dispute, therefore, combines a legal disagreement with a larger political question: whether continued settlement construction in strategically important parts of the West Bank could make it increasingly difficult to create a viable and territorially connected Palestinian state.