Escalating US penalties on violent Israeli settlers are now viewed by some within "Israel" as a possible danger to the financial survival of all Israeli settlements and businesses in the occupied West Bank.

The US sanctions announced in February and expanded in March and April have been interpreted in "Israel" and elsewhere as a humiliating public censure of a close ally rather than a significant political shift.

Israeli analysts believe this underestimates the intensity with which the US enforces its financial restrictions and the reach of the new sanctions structure.

Speaking to The Observer, they explained that despite the relatively short list of sanctions targets in West Bank settlements, financial institutions may nevertheless be hesitant to provide services to anybody or any company established there, for fear of unwittingly facilitating unlawful operations.

A new executive order allows the US to target anybody "responsible for or complicit in threatening the peace, security, or stability of the West Bank," unlike previous sanctions that primarily targeted violent individuals and small organizations.

This includes politicians, and according to Antony Blinken, Israeli authorities should "do more" to stop the violence against Palestinians in the West Bank, emphasizing that the new objective includes the "viability of a two-state solution."

A number of financial institutions are already reconsidering their connections with the West Bank following a warning from FinCEN, the US government's Financial Crimes Enforcement Network, according to Shuki Friedman, a former head of "Israel's" Iran sanctions program.

The action is delegitimizing "all activities" from the West Bank, citing that institutions will now effectively reevaluate their actions.

US paying 'lip service' with sanctions

Michael Sfard, one of "Israel’s" leading human rights lawyers, expressed the belief that the sanctions could be the most consequential shift in US policy in decades.

The Yesha Council, which advocates for settlers, essentially admitted that the punishments marked a policy shift that may jeopardize their future, although dismissing the prohibitions as "absurd" and having "zero impact".

Shlomo Neeman, the group's leader, believes that the true intent behind the legislation is to sanction any Israeli who "doesn't share their vision of a so-called 'two-state solution'."

If the US widens the list of sanction targets to include enterprises tied to violent settlers, Israeli banks may be unable to continue supporting West Bank businesses and populations.

Following the initial wave of penalties, Israeli institutions faced internal pressure to continue supplying the targets. The people did not comprehend that if banks wanted to function in a worldwide system based on dollars, they had little alternative but to comply with American demands.

Other nations, such as Russia and Iran, have partially transferred their commerce to other partners and rebuilt their financial systems in the wake of US sanctions, but "Israel" has no genuine options, according to the news outlet.

A former deputy state attorney and head of "Israel’s" financial intelligence called the decision "lip service" from the US, which faces internal pressure, citing that "the Americans are very much supporting Israel in this war.”

Biden admitted last week that the Israeli occupation has killed civilians in Gaza using bombs supplied by the United States, marking the first instance of such an admission by any US official since the genocidal war on the Strip began last October.

His remarks came during an interview for CNN, where he also commented on the recent Israeli invasion of Rafah.