JERUSALEM - Israel's highest court on Tuesday struck down a contentious law that sought to retroactively legalize thousands of West Bank settlement homes built unlawfully on private Palestinian land.

Israel's parliament passed the law in February 2017, but it was frozen by the Supreme Court shortly thereafter while it heard petitions against it.

The court's decision was criticized by the ruling pro-settlement Likud party, but welcomed by its coalition partners in the Blue and White party, exposing a rift in the fragile new government.

The court ruled Tuesday that the law was illegal, saying it “retroactively authorized illegal actions done by a particular population in the area while harming the rights of another population."

According to the law, Palestinian landowners would be compensated either with money or alternative land, even if they did not agree to give up their property.

Most of the international community considers Israel's West Bank settlements illegal under international law and an obstacle to peace with the Palestinians. Israel captured the territory in the 1967 Mideast war and in the decades since built dozens of settlements that are now home to about half a million Israelis.

The ruling comes just weeks before Israeli Prime Minister Benjamin Netanyahu has promised to start annexing parts of the West Bank, a move that has drawn growing criticism from abroad and raised concerns that it could trigger Palestinian unrest.

Netanyahu's hard-line Likud and its allies criticized the court's decision. The party, which has a strong pro-settler base, said it was “unfortunate that the High Court of Justice intervenes and annuls an important law for the settlements and their future. We will act in order to legislate the law anew.”

The Blue and White party, headed by Defence Minister Benny Gantz, said in a statement that the law ran contrary to the Israeli legal code, and that it respected the court's decision and would ensure that it was carried out.

Blue and White and Likud struck a power-sharing agreement in April following three deadlocked national elections. Their controversial deal calls for Netanyahu to serve as prime minister for the government’s first 18 months before being replaced by Gantz for the next 18 months. Their blocs have a similar number of ministers and mutual veto power over key decisions.

The disagreement over the nullified law exposes a major rift between the two parties concerning the justice system and Israel's West Bank settlement policies.

Yonatan Gher, head of Combatants for Peace, an Israeli organization opposed to the settlements, said “we hope that in this decision the Supreme Court is sending the Israeli government a clear message that the fate of the annexation plans will be the same.”

News from © The Associated Press, 2020