Israeli Finance Minister Bezalel Smotrich and National Security Minister Itamar Ben-Gvir celebrated the re-opening of the Sa-Nur settlement in the occupied West Bank, 21 years after it was evacuated.
At a ribbon-cutting ceremony on Sunday, Mr Smotrich described the move as “a historic correction to the criminal expulsion” and said Israeli authorities were “burying the idea of a Palestinian state”.
Sa-Nur, in the northern West Bank, was dismantled in 2005 under Israel’s disengagement plan from the Gaza Strip. It had housed 43 families.
This month, a video appeared online showing electricity being restored to the site for the first time in more than two decades.
Over the years, Israeli settlers have repeatedly attempted to return, only to be removed by Israeli forces.
During the settlement's re-opening, Mr Smotrich called for Israel to settle "all of Gaza".
Israel's cabinet has also approved the Homesh settlement, another site included in the 2005 disengagement.
The far-right government recently approved 34 settlements alongside 68 others under Prime Minister Benjamin Netanyahu.
"Until the establishment of this government there were 127 official settlements in the West Bank. Adding another 102 settlements is an increase of 80 per cent," said Israeli settlement watchdog organisation Peace Now.
The Likud-led coalition's approval of rapidly expanding settlements means thousands of Palestinians have received demolition orders, UN data shows. The people of Al Fandaqumiya, near Sa-Nur, were the latest villagers to receive such orders.
The head of its village council said the demolition orders gave shopkeepers a month's notice. Refaat Qaruriya said Sa-Nur would make life difficult for village residents, who worried they would no longer be able to access their lands.
The Israeli military said that demolition orders were issued because the stores were constructed without permits, and the timing was unrelated to Sa-Nur.
Palestinians say such permits are all but impossible for them to obtain.
"This development [in Sa-Nur] raises serious concerns regarding further escalation, restrictions on Palestinian access to land, and the deepening of a de facto annexation reality," Amir Daoud, a Palestinian Authority official, said in a statement to Reuters.
After Gaza was occupied by Israel in the 1967 Middle East war, the 2005 withdrawal from the strip was a realisation of a dream long entertained by Palestinians there: to be rid of Israel’s heavy-handed, 38-year rule and have a chance of self-rule that had eluded the territory since Israel's creation in 1948.
Israel's prime minister at the time, Ariel Sharon, saw the removal of Jewish settlements in Gaza – which was hugely controversial in Israel – as a way of lowering tension and forcing the strip to show itself capable of self-rule.
But the disengagement plan set off a chain reaction that may be partly responsible for the state of occupied Palestine today as Mr Netanyahu's plans to re-occupy Gaza are ignited, and settlement expansion in the West Bank is the highest its been in years, dealing a significant blow to hopes for an independent Palestinian state.
