(JTA) — The U.S. State Department said it was “profoundly concerned” about a controversial bill that would help legalize West Bank outposts built on Palestinian land.

Asked about the measure, known as the Regulation Bill, State Department spokesman Mark Toner said Tuesday that the enactment of such a law is “profoundly damaging to the prospects for a two-state solution.”

“And we’ve also been troubled by comments that we’ve heard by some political figures in Israel that this would be the first step in annexing parts of the West Bank,” Toner said.

Toner added that passage of the bill “would be a dramatic advancement of the settlement enterprise, which is already, as we’ve said, greatly endangering the prospects for a two-state solution. But I also – as you note, it’s changing the reality on the ground, and we’re deeply concerned about it. We’re conveying those concerns. The legislation’s not yet passed into law. We hope that it does not become law, but we certainly hope that changes or modifications can be made to it.”

On Wednesday, two Knesset committees voted in a joint meeting to allow a revised version of the bill to be brought to a vote in the Knesset plenum. The first of three readings required for passage of the bill was set for Wednesday afternoon.

Earlier in the week, a section of the bill that would have allowed the government to act against a Supreme Court ruling to raze the Amona outpost by December 25 was cut from the bill, which would recognize other settlements found to be built on private Palestinian land.

The bill would allow the Israeli government to recognize construction built with government assistance and in good faith — meaning those outposts whose builders were not aware they were constructing on private land. If the original owners of the land are known, they would be eligible to receive financial compensation from the government.

According to the settlement watchdog group Peace Now, the bill could legalize 55 outposts and 4,000 housing units in the West Bank.

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