Jerusalem  — Israeli Prime Minister Benjamin Netanyahu announced on Tuesday that he was reviving Israel’s most contentious settlement plan, a proposal that opponents say would split the West Bank, cut off East Jerusalem and make a contiguous Palestinian state impossible.

Netanyahu’s announcement, six days before an election in which the right-wing leader needs backing from settlers and their supporters, would give the go-ahead to 3,500 homes for Jewish settlers on a parcel of barren hills known as E-1...

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