Germany on Friday called on the Israeli government to stop settlement construction in the West Bank after Israel's far-right finance minister said work would start on a plan for thousands of home that would divide the Palestinian territory.

Israel’s far-right finance minister said Thursday that a contentious new settlement construction in the Israeli-occupied West Bank is going ahead — a project that Palestinians and rights groups worry will scuttle plans for a Palestinian state by effectively cutting the territory into two parts.

An Israeli settlement is made up of housing units built for Jewish Israelis on land captured by Israel from Jordan in the 1967 Middle East war, primarily in the West Bank and East Jerusalem. The land is home to Palestinians who seek a future independent state.