Thoughts and Prayers No More

For decades, American politicians - particularly Democrats - have done little more than pay lip service to the idea of a 2 State Solution. Now, two new Bills in Congress suggest the party may finally be prepared to take the action needed to save the approach - if it is not already too late.

Israel’s settlement enterprise in the West Bank has long been one of the key obstacles to Palestinian statehood, eroding the viability of a contiguous Palestinian state through the transfer of Israeli population (illegal under the Geneva Conventions) onto Palestinian land - a transfer accompanied by the growth of a security and economic enterprise that has resulted in a de facto annexation of much of the West Bank.

Given the advancement of the settlement project, it is fair to ask whether a Two State Solution remains a viable possibility. A New Policy itself takes no position on what the appropriate outcome is on the ground, beyond our belief in self determination as a right of all peoples. But if you want a Two State Solution, it’s very obvious that you can’t get there without challenging - and ultimately rolling back - Israeli settlements.

"This Place Is Ours"

In 2025, Israeli Prime Minister Benjamin Netanyahu attended the signing of a plan to fund and build 7,600 housing units between Jerusalem and the Jordan River valley, cutting the West Bank into two. The project is  known as Settlement E1. There, he declared: "We are going to fulfil our promise that there will be no Palestinian state. This place is ours." Shortly before, Finance Minister Bezalel Smotrich had said the approved E1 plan "will bury the idea of a Palestinian state." Statements from Netanyahu and Smotrich are open declarations of the Israeli government intent for this project . 

The E-1 project, if it goes forward, will be an expansion of an existing settlement, Ma’ale Adumim. Its location is what makes it so consequential: it sits on the land east of Jerusalem that connects the northern and southern halves of the West Bank. The result would split the West Bank in two. Palestinians in the north and south would be connected only by a narrow road lined with checkpoints and surrounded by armed settlers.

From Thoughts and Prayers to Real Consequences

For years, Congress's response to settlement expansion amounted to thoughts and prayers: statements of "concern" with nothing attached. Israel took note and has opened bidding on the first 1,234 of E1's 3,401 planned units recognizing that Washington had done little in response to escalating settler violence.

In September 2026, that began to change. Senator Chris Coons (D-DE) and Representative Joaquin Castro (D-TX-20) introduced separate bills that finally begin to weigh in on Israel’s settlement enterprise. They arrive as Israel's expansionist ambitions reach beyond the West Bank into Gaza, southern Lebanon, and southern Syria.

S. 5476, introduced by Senator Coons, targets E1 directly. It would sanction any foreign person who bids on E1 construction, takes part in building it, or helps transfer Israeli civilians into it.

The Stop the Settlements Act, H.R. 10642, introduced by Representative Castro on September 30, 2026, goes further. It would sanction anyone involved in building or expanding any settlement, new or existing, after the bill's introduction, and would also sanction goods produced in illegal Israeli settlements.

U.S. sanctions are not a slap on the wrist. Sanctioned people and companies have their U.S. assets frozen, are barred from doing business with American companies, and are effectively shut out of the U.S. dollar system, because most international banks will not risk dealing with them.

Already Making a Difference

Shortly after Coons’ E-1 sanctions bill was introduced, Israel's attorney general announced a pause on E1 tenders, although bids are still being accepted. 

Anyone considering investing in E1 should take note too. Political change is moving through Congress, and the midterm elections could produce a new Congress, starting January 3, 2027, that looks at the Israeli settlement project through a lens the Israeli government is ill prepared for. Whether this bill passes now or is reintroduced next year, an E1 investor faces a real risk of being sanctioned for enabling a policy designed to destroy Palestinian self-determination.

Standing With Our Allies

The Stop the Settlements Act sends an even stronger message to the Israeli government. If enacted, it would expose a substantial share of the Israeli economy to sanctions, cutting off access to the American market and the dollar system.

Castro’s bill would also bring the United States in line with its closest NATO allies, including Canada, Denmark, Finland, France, Iceland, Norway, Poland, Portugal, Spain, Sweden, and the United Kingdom, as well as our partner Ireland. That would put the world's leading democracies together behind an effort to restore a glimmer of hope for a two-state solution. It would also tell Israel that the ethnic cleansing of Palestinians will no longer be tolerated, and any lasting solution to the Israeli-Palestinian conflict must come through negotiation and self-determination, not through forced displacement and ethnic cleansing.

A Movement, Not a Moment

These bills come out of a fast-growing political movement. Unconditional aid to Israel has become politically toxic within the Democratic Party, but sanctions mark a transition from an (as yet unfruitful) debate about withholding assistance, to a more proactive one about actually punishing noncompliance.

And what makes these bills different from the Biden Administration’s short-lived sanctions program is that instead of focusing on violent settlers - as though a few ‘bad apples’ are where the problem begins and ends - these bills target the settlement enterprise itself - the economic and political structures deeply embedded in Israeli government and society - that underlie the broader effort to disenfranchise and ethnically cleanse Palestinians.

Realistically, neither Bill, even should either pass in the next Congress, is likely to survive a Presidential veto under the current Administration. But what makes them important is that Congress - and the Democratic party - are finally willing to turn one of America’s most powerful foreign policy tools against a core part of Israel’s strategy in the West Bank, and in doing so are finally admitting that the problem here is not a handful of extremists, but the entire system behind them. There’s a lot more that Congress - and any future President will need to do of course. But Coons, Castro, and their growing list of cosponsors are indicating for the first time since Oslo that the Democrats are increasingly serious and intent on taking meaningful action .

For the first time in a long time, the question in Congress is no longer whether Israel will face consequences for killing Americans and ethnically cleansing Palestinians. The question is how soon.