Prime Minister Benjamin Netanyahu announced his intention to immediately extend Israeli sovereignty over the Jordan Valley and northern Dead Sea area should he be re-elected to a fifth consecutive term as Israel's leader.
Netanyahu said he would wait, out of respect for President Donald Trump, to annex the areas of Judea and Samaria in question until after the president presents his peace plan.
Palestinian official Saeb Erekat said Netanyahu's annexation plan is "manifestly illegal".
The worldwide community, along with the Palestinians, overwhelmingly considers Israeli settlements in the West Bank and east Jerusalem illegal.
Meanwhile, in a statement issued before Netanyahu's latest announcement, Palestinian Prime Minister Mohammad Shtayyeh had said that the Israeli PM is "a prime destroyer of the peace process", reported Reuters.
While Netanyahu had spoken about working towards a two-state solution in the past, as the country has shifted further to the right, he has brought it up less frequently in recent times.
"Israel's plan to annex the Jordan Valley, an integral part of occupied Palestine, is manifestly illegal and merely adds to Israel's long history of violations of global law", Erekat, a former peace negotiator, said in a statement. Such action would gobble up most of the West Bank territory sought by the Palestinians, leaving them with little more than isolated enclaves.
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In a speech televised live on all Israeli TV channels, Netanyahu said he would also annex illegal Israeli settlements after the Jordan Valley's annexation was complete.
The 2,400 square kilometer (926.65 square mile) valley accounts for almost 30 percent of the territory in the West Bank.
Ahead of April elections, Trump recognized Israeli sovereignty over the occupied Golan Heights, seized from Syria in the 1967 Six-Day War.
Right-wing nationalist votes will be key to Netanyahu's efforts to continue his reign as Israel's longest-serving prime minister.
He said the plan was being drafted in coordination with the Trump administration, which is expected to release its long-awaited Middle East peace plan sometime after Israel's September 17 election.
Netanyahu billed Tuesday's announcement as "dramatic", but it was essentially a repetition of promises he has made since April, when Israelis went to the polls in the first round election.
Next week's elections in Israel come just five months after the last time at the polls where Netanyahu's right wing won the majority of seats but failed to come to an agreement and join into one governing coalition. Pending a hearing, the prime minister faces indictments in three criminal cases involving fraud, bribery and breach of trust.