Scoop: U.S. tells Israel if Smotrich gets West Bank authority it's step toward annexation

• The Biden administration has said it opposes any unilateral moves by Israel that could hamper efforts to negotiate a two-state solution to the Israeli-Palestinian conflict, including settlement expansion and annexation.

Catch up quick: Named finance minister and a minister in the Ministry of Defense, Smotrich is one of the most senior members of the Israeli government.

• If he's given authority over the two military units in charge of civilian policy in the West Bank, as the coalition agreement stipulates, Smotrich will have unprecedented influence on the policy related to Israeli settlements.
• Israeli Defense Minister Yoav Galant is vehemently opposed to giving away any of his authority to Smotrich. Several meetings between the two ministers did not lead to any compromise.
• Netanyahu has asked both ministers to present him with their proposals in order for him to decide which authorities, if any, will be transferred to Smotrich.

Behind the scenes: Barbara Leaf, the assistant U.S. secretary of state for Near East Affairs, met with national security adviser Tzachi Hanegbi and other senior Israeli officials in Jerusalem last week to discuss the escalation in the West Bank.

• Leaf told them the Biden administration is concerned about the possible transfer of some of the authorities in the West Bank from Galant to Smotrich, U.S. and Israeli officials said.
• Leaf said that such a move would further complicate the situation in the West Bank at a time when de-escalation is needed and will be considered by the Biden administration as a step towards annexation by the Israeli government, the officials said.
• IDF and Israeli defense ministry officials told Leaf and other Biden administration officials they highly object to any transfer of authority over the West Bank to Smotrich and are concerned by its implications, according to the U.S. and Israeli officials said.

The big picture: Since Israel occupied the West Bank in 1967, it has been administered by the Israeli Defense Ministry and the IDF under military occupation laws in order to adhere to the Geneva convention.

• Israel has never formally annexed parts of the West Bank. Israeli settlements, which much of the international community considers illegal under international law, have grown significantly in recent years, but they don't have the same status as towns inside Israel and receive many of their services from the Defense Ministry and the Israeli military.

• Smotrich and his supporters in the settler lobby have tried for many years to “normalize” the status of the settlements and make them similar to that of towns and cities inside Israel. Transferring authorities from the IDF to civilian ministries would be a major step in that direction.

Between the lines: Smotrich holds significant political leverage over Netanyahu and Galant both because of his control of the budget and his ability to topple the government if his demands are not met.

What they're saying: A State Department spokesperson said the Biden administration believes it is critical for Israel and the Palestinian Authority to refrain from any unilateral steps that exacerbate tensions or undercut efforts to advance a negotiated two-state solution, such as steps towards the annexation of territory.

• “This certainly includes the further extension of Israeli civilian law to the West Bank," the State Department spokesperson said.
• The Israeli Prime Minister’s Office declined to comment.

Go deeper:

• U.S. asked Israel and the Palestinian Authority to "pause" certain actions in West Bank and at UN
• Israel sanctions Palestinian Authority over push for ICJ opinion on occupation