A dramatic assertion by Israeli Finance Minister Bezalel Smotrich that he had “cancelled” the 1997 Hebron Agreement was swiftly contradicted by his own government’s Foreign Ministry on Tuesday, exposing a rift at the heart of Benjamin Netanyahu’s coalition over how to publicly frame the erosion of Palestinian authority in the occupied West Bank. Smotrich, speaking at a ceremony to inaugurate a new settlement near Hebron, declared that the Supreme Planning Council of the Civil Administration had completed the transfer of all planning and construction powers from the Palestinian municipality to Israeli hands, a move he said effectively nullified the decades-old accord. The ministry, however, insisted in a social media statement that “the Hebron Agreement has not been canceled,” clarifying that the only change was a security cabinet decision months ago to shift administrative control over the city’s Jewish heritage sites and the adjacent settler enclave.

Under the 1997 pact, which followed the Oslo Accords, Hebron was carved into two zones: H1, comprising roughly 80 percent of the city under full Palestinian civil and security control, and H2, where approximately 800 Jewish settlers live among 40,000 Palestinians under Israeli military rule. Crucially, the agreement left the Palestinian municipality responsible for planning and building across the entire city, including the site known to Jews as the Cave of the Patriarchs and to Muslims as the Ibrahimi Mosque. Smotrich’s announcement means that authority over the contested shrine and the Jewish quarter now rests with an Israeli committee he himself oversees, a shift he described as “a step toward practical sovereignty” over Hebron and the holy places.

Viewed from Ramallah, the move was met with immediate condemnation. The office of Palestinian President Mahmoud Abbas warned it violated bilateral agreements and international law, while Palestinian media framed it as the latest assault on the city’s political and legal status. In Arab capitals, the seizure of powers over a site sacred to both faiths was seen as a provocation that could inflame tensions during a volatile period. The shrine, revered as the burial place of Abraham, Isaac and Jacob, has long been a flashpoint; its division into separate prayer areas and the imposition of Israeli security restrictions have been a source of deep resentment.

Analysts in London and Brussels note that the episode illustrates the widening gap between the ideological ambitions of Smotrich, a settler himself who also holds a defence ministry portfolio overseeing settlements, and the diplomatic caution of Israel’s professional foreign service. By publicly claiming the agreement’s cancellation, Smotrich signalled to his base that the Oslo-era architecture is being dismantled, while the Foreign Ministry’s denial appeared calibrated to limit international backlash. The distinction is more than semantic: formally abrogating a signed accord would carry far greater legal and diplomatic consequences than a bureaucratic reallocation of planning powers, even if the practical outcome for Palestinians is the same.

Looking ahead, the transfer consolidates a pattern of incremental annexation that bypasses formal treaty annulment. With Smotrich promising further steps to extend Israeli sovereignty over West Bank holy sites, and the Netanyahu government reliant on far-right support, the Hebron decision is likely to be a template rather than an isolated act. For Palestinians, it deepens the fragmentation of what remains of their administrative authority; for the international community, it tests the limits of rhetorical condemnation in the absence of concrete measures to enforce the two-state framework that the 1997 agreement was designed to preserve.