(VOVworld) - Israel is working to revive and extend plans for new Jewish homes in the contentious settlement of the occupied West Bank known as E1, settlement watchdog Peace Now said on Monday.

Palestinians, together with Israeli and foreign activists, stand near protester tents in the area known as E1 near Jerusalem, on January 12, 2013. Baz Ratner / Reuters

In a report it said was based on government data obtained under a Freedom of Information Act request, the group said the housing ministry was seeking to build 55,548 units in the West Bank, including two new settlements, of which more than 8,300 homes would be in E1. The housing ministry spokeswoman could not be immediately reached for comment on Monday. E1 and the adjacent Maaleh Adumim settlement form an Israeli buffer east of Jerusalem that the Palestinians say would divide the West Bank and greatly diminish the possibility of creating a contiguous Palestinian state. Peace Now wrote that the area of Maaleh Adumim and E1 is one of the most sensitive areas in terms of the chances for a two state solution. The United States, the United Nations and the European Union oppose all Israeli settlement building but have voiced particular concern about the plans for E1.