In the introduction to the report on its site, B'Tselem refers to the declaration of "state land," plus the seizure of private Palestinian land (for more on the latter, read articles on findings by the Israeli groups Peace Now and Yesh Din):
The principal means Israel used for [settlement] was declaration of “state land,” a mechanism that resulted in the seizure of more than 900,000 dunams of land (sixteen percent of the West Bank), with most of the declarations being made in 1979-1992. The interpretation that the State Attorney's Office gave to the concept “state land” in the Ottoman Land Law contradicted explicit statutory provisions and judgments of the Mandatory Supreme Court. Without this distorted interpretation, Israel would not have been able to allocate such extensive areas of land for the settlements.
In addition, the settlements seized control of private Palestinian land. By cross-checking data of the Civil Administration, the settlements’ jurisdictional area, and aerial photos of the settlements taken in 2009, B'Tselem found that 21 percent of the built-up area of the settlements is land that Israel recognizes as private property, owned by Palestinians.
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