Israel’s hard-Right finance minister has landed himself in a row with his coalition partners over his refusal to divert funds for West Bank settlements to the war effort.

A coalition party leader has told Benjamin Netanyahu that his five ministers would vote down a new budget unless more money is dedicated to the war, according to a letter quoted by Israeli state media.

The current 900 million shekels (£191 million) portion of the budget pledged to the coalition to distribute earmarks 300 million shekels for the development of illegal settlements in the West Bank, as well as 200 million for education and cultural projects for the country’s ultra-Orthodox community.

The opposition has accused Bezalel Smotrich, the finance minister known for his hard-Right views, of reckless spending. They have cited his funding for yeshiva students who refuse to serve in the army, and investments in illegal Israeli settlements in the West Bank.

War Cabinet minister Benny Gantz in a letter to the prime minister, Mr Netanyahu, said spending such large sums on controversial projects “will harm national resilience and unity of Israeli society.”

‘Settlements are Israel’s greatest security liability’

Josep Borrell, the EU’s foreign policy chief, said on Monday he was “appalled” to learn that the Israeli government is committing new funds towards West Bank settlements in the middle of a war.

“This is not self-defence and will not make Israel safer,” he said on Twitter. “The settlements are a grave breach of international human rights law, and they are Israel’s greatest security liability.”

Mr Smotrich, who urged the government this year to prepare to double the settlements’ population to one million, came under fire from more moderate members of the cabinet earlier in the war when he refused to transfer tax revenues that Israel collects for the Palestinian Authority to the West Bank.

Smoldering tensions in the West Bank

Israeli politicians and officials from across the political spectrum including the defence minister urged Mr Smotrich to unfreeze the funds, warning that the move risks further igniting smouldering tensions in the West Bank.

Mr Smotrich responded in an open letter on Monday morning, claiming that the contentious 900 million shekels in the budget would go towards teachers’ salaries, “security needs” in the West Bank and other expenses.

He added that the government will allocate three and half billion shekels towards funding hotel stays for over 100,000 people evacuated from border towns and villages in the country’s north and south.

Another two billion shekels was expected to go to the National Security Ministry, led by another far-Right politician, to arm the police and establish an armed community defence team in illegal West Bank settlements.

In recent weeks, the Biden administration raised the possibility of imposing sanctions on settlements for the violence in the West Bank.