The US has shifted its position on Israeli settlements in the occupied West Bank, no longer viewing them as inconsistent with international law.
US Secretary of State Mike Pompeo said the status of the West Bank was for Israelis and Palestinians to negotiate.
Israel welcomed the move – a reversal of the US stance under President Donald Trump’s predecessor, Barack Obama.
Settlements are communities established by Israel on land occupied in the 1967 Middle East war.
They have long been a source of dispute between Israel and the international community, and the Palestinians.
“After carefully studying all sides of the legal debate,” Mr Pompeo told reporters, “the United States has concluded that “the establishment of Israeli civilian settlements in the West Bank is not, per se, inconsistent with international law”.
“Calling the establishment of civilian settlements inconsistent with international law hasn’t worked. It hasn’t advanced the cause of peace,” he added.
Chief Palestinian negotiator Saeb Erekat said the US decision was a risk to “global stability, security, and peace” and said it threatened to replace international law with “the law of the jungle”.