Last Monday, US Secretary of State Mike Pompeo announced that the US was abandoning its four-decade-long position that Israeli settlements built on occupied Palestinian land are illegal and inconsistent with international law.

"After carefully studying all sides of the legal debate, this administration agrees that the establishment of Israeli civilian settlements in the West Bank is not, per se, inconsistent with international law," Pompeo said.

Pompeo told reporters at the State Department that the Trump administration believes any legal questions about settlements should be resolved by Israeli courts and that declaring them a violation of international law distracts from larger efforts to negotiate a peace deal.

“Calling the establishment of civilian settlements inconsistent with international law has not advanced the cause of peace,” Pompeo said.

“The hard truth is that there will never be a judicial resolution to the conflict, and arguments about who is right and who is wrong as a matter of international law will not bring peace.”

Palestinians, the Arab League, the United Nations, the European Union and a number of countries have decried the move as undercutting any chances of a broader peace deal.

On Wednesday, Saudi Arabia said it completely rejects Washington's statement on Israeli settlements in the West Bank, state news agency SPA reported.

The Arab League's secretary-general, Ahmed Aboul-Gheit, said the decision would result in "more violence and cruelty'' against the Palestinians at the hands of the Israeli settlers and "undermines any possibility'' of achieving peace.

The Arab League will hold an emergency meeting of foreign ministers on Monday to discuss Washington's change of position on Israeli settlements in the West Bank, according to Egypt's state news agency MENA.

Jordan’s foreign minister, Ayman Safadi, said in a tweet that the settlements are a blatant violation of international law and UN resolution 2334 of 2016, and would have “dangerous consequences.”

"The bias of the Trump administration towards the most extreme in Israel blinds it from seeing the basic principles of international law and consensus," said Palestinian Prime Minister Mohammad Shtayyeh on Twitter.

Palestinian Ambassador to the United Nations Riyad Mansour told Reuters he was consulting nations at the Security Council to "lobby a unified international position to confront the American illegal announcement regarding settlements."

Diana Buttu, a former legal adviser to the Palestine Liberation Organisation, said that every US administration since Reagan had "pandered to Israel on settlements."

"I get the sense from the Palestinian leadership's responses that they believe this issue has to be framed as not just about 'us' but about the world order that people believe in... when you go down this path it isn't just about Palestine, this affects Crimea and other places around the world."

Palestinian chief negotiator Saeb Erekat said the Palestinians would take a series of measures to oppose the US decision, including calling for a UN Security Council debate.

"We are going to the [UN] General Assembly and we will ask... the International Criminal Court to open an official judicial investigation," he added.

Dangerous consequences

The United Nations and European Union stressed that the decision would not change the reality that the settlements are illegal.

UN Security Council members have rebuked the U.S. announcement that it no longer considers Israeli settlements to be a violation of international law. They're stressing that the settlements are illegal and undermine a potential two-state solution to the Israeli-Palestinian conflict.

The council's monthly Mideast meeting, just two days after the U.S. announcement, was dominated by negative reaction to the new American policy.

Kuwait's Ambassador Mansour Al-Otaibi said 14 council members agreed on a press statement Wednesday saying settlements are illegal and undermine a two-state solution and a 2016 council resolution. But he said one country objected _ a reference to the United States.

The European Union’s foreign policy chief, Federica Mogherini, said in a statement that the EU policy on Israeli settlements “is clear and remains unchanged: all settlement activity is illegal under international law and it erodes the viability of the two-state solution and the prospects for a lasting peace.”

Russia's foreign ministry said it viewed Washington's move as another measure contradicting the legal footing for a peace deal and said it would likely further heighten tensions on the ground.

The French foreign ministry said it "regrets any decision likely to encourage... settlement building."

A spokesperson for the British Foreign Office reiterated the UK's position that settlements "are illegal under international law, present an obstacle to peace and threaten the physical viability of a two-state solution."

On Wednesday, the Vatican expressed concern that "recent decisions'' could undermine regional stability in the Middle East, in an apparent reference to the US reversal of position on Israeli settlements.

The Vatican did not specifically mention the US decision, but it did refer to "the recent decisions that risk undermining further the Israeli-Palestinian peace process and the already fragile regional stability'' in the Middle East.

The Holy See reiterated its support for a "two-state solution for two peoples as the only way to reach a complete solution to this age-old conflict.''

It said it supports Israel's right to "live in peace and security within the borders recognised by the international community'' and supports "the same right that belongs to the Palestinian people, which must be recognised, respected and implemented.''

Israel's Prime Minister Benjamin Netanyahu travelled to the West Bank on Tuesday to celebrate the US announcement, which he called a "huge achievement'' that "fixed a historic wrong.''

"I think it is a great day for the state of Israel and an achievement that will remain for decades,'' he said.

Israeli right-wing leaders also welcomed the decision.

David Friedman, the Trump-appointed US Ambassador to Israel, said on Twitter that Pompeo's announcement would "advance the cause of peace" by creating a "level playing field" for future talks.

Later Tuesday, Netanyahu said the US decision "gives us a once-in-a-lifetime opportunity'' to annex the Jordan Valley, an area in the West Bank seen as the breadbasket of a Palestinian state. In a video, he called on his political rivals, with whom he is currently in coalition talks, to form a unity government and make annexing the area its first priority.

Settlements are seen as one of the most difficult issues in the decades-long Israeli-Palestinian conflict.

A US decision effectively backing Israel's building of settlements in the occupied West Bank, long a cherished item on conservative Christians' wish list, is expected to strengthen evangelicals' support for Trump as he seeks re-election in 2020, said Mike Evans, a leader of the president's evangelical advisory group.

“There was virtually no lobbying for the policy shift because he [Trump] knows us, he knows what we believe,” Evans told Reuters in New York.

Evangelicals have been a core base for Trump since the 2016 election. Many are also staunch supporters of Israel, feeling a religious connection with the Jewish people and the Holy Land.

Facts on the ground

Over 400,000 settlers now live in the West Bank, in addition to more than 200,000 settlers in East Jerusalem alongside more than 3 million Palestinians.

Trump had already tightened his bond with his pro-Israel constituency by recognising Jerusalem as Israel's capital in 2017, moving the US embassy to the city in 2018 and then endorsing Israel's annexation of the Golan Heights, which was captured from Syria in 1967.

US officials denied that the announcement was timed to help the right-wing Netanyahu, who is struggling to remain in power following two inconclusive Israeli elections and who faces possible criminal prosecution over corruption charges, which he has denied.

The settlement announcement could also help lay part of the legal groundwork for Trump’s long-delayed peace plan, which Pompeo said he hopes would be rolled out “before too long,” after a new Israeli government is formed.

While details have been kept under wraps, the plan is widely expected to call for Israel to keep the vast majority of its settlements.

However, a US official told Reuters: “Nothing in yesterday’s announcement should be read as previewing the content of the White House’s vision for peace.”