In the Jewish National Fund, a 120-year-old Zionist organisation that acquires land, plants trees and carries out construction projects in the Holy Land, generations of Jews have dropped spare change into the famous blue boxes.

But the Israeli party, known by its Hebrew acronym KKL, is now considering extending its operations officially into the occupied West Bank. That has ignited fierce opposition in the United States from left-leaning Jewish groups, widening a divide with Israel’s increasingly right-wing government.

The debate has drawn attention to the fact that, for decades, the KKL, which controls more than a tenth of all the land in Israel, has been secretly operating in the West Bank, constructing and growing settlements that are considered a breach of international law by most of the international community.

A separate organisation based in New York, also known as the Jewish National Fund, does not take a stand on settlements and is primarily interested in Israel.

When the Axios news website announced that the KKL was contemplating a plan to publicly finance land purchases from Palestinians in the West Bank, the controversy exploded earlier this month. Potentially, the move could channel hundreds of millions of dollars into settlement expansion, some of them deep within the occupied territories.

In the 1967 war, Israel took the West Bank, and the Palestinians want it to be the key part of their future state. The colonies, which house almost 500,000 Israelis, are seen by them as the biggest barrier to a two-state solution to the conflict.

Israel sees the West Bank as the Jewish people’s biblical heartland and insists any division should be negotiated in peace talks that have been essentially moribund for over a decade.

The plan will have to be accepted by the board of directors of the KKL, which is composed of members of many Jewish organisations and is not expected to decide before the country holds national elections on 23 March.

“The KKL-JNF operated in all parts of the Land of Israel, including Judea and Samaria, throughout the years and up to this very day,” it said, using the biblical name of the West Bank. “There is no intention at this stage of opening up a new area in Judea and Samaria.”

It added that all projects were confirmed in advance by donors, indicating that the funds allocated to projects within Israel would not be moved to the occupied territories.

But Peace Now, an Israeli anti-settlement watchdog, claims that for decades the KKL has been secretly working in the West Bank, purchasing at least 65,000 dunams (16,000 acres) of settlement land, primarily through a subsidiary.

Brian Reeves, spokesman for Peace Now, said, “This has happened before, and so this is not a sea change.” “But this would be the first time they have officially endorsed this openly, the idea of buying land in the West Bank, saying, in essence, ‘we don’t agree with international law, or that there is occupation, or that the two-state solution is important.'”

The selling of land to settlers is seen by Palestinians as a violation of their national cause, so such transactions are typically done secretly or through intermediaries, opening them up to accusations of fraud. They lead, in some instances, to the eviction of Palestinian families who say they have never sold their land.

While the settlements enjoy wide support within Israel, many Jews in the West, who are often at odds with the Israeli government on religious issues, have come to see them as an obstacle to peace. Most American Jews belong to Judaism’s more secular streams and feel alienated by the ultra-Orthodox authorities of Israel, who challenge their religion and practises.

Rabbi Rick Jacobs, president of the Union for Reform Judaism, North America’s largest Jewish movement, says the KKL’s change stems from the recent World Zionist Congress elections that brought right-wing politicians more closely associated with the Israeli government to power.

The KKL plan has been denounced by his party and others opposed to treaties and have vowed to oppose it when the board meets, but it is uncertain if they have enough votes. Jacobs is worried that for many in the West, the move could tar the KKL or cause conflicts with the current U.S. administration, which is also opposed to the expansion of settlements.

He admitted that the KKL has worked in the West Bank in the past, but says its activities have fallen significantly over the last two decades before quietly resuming and accelerating in recent years, causing the URJ and other groups to oppose it.

“We basically blew the whistle and said wait a minute, there’s a whole lot of land buying going on under the table, without oversight under the radar, and honestly, without even the formal authorization to do so,” he said.

“The majority of Jews here in North America are opposed to the proliferation of the settlement business,” he said. “That’s something very strongly felt by American Jews.”

With its own board and its own offices in New York and Jerusalem, the U.S.-based JNF is a distinct agency. Russell Robinson, CEO, said it does not participate in politics and focuses on ventures in Israel’s Negev and Galilee areas.

“It’s not where most people want to be involved in politics,” he said. “They want to be involved in making a better place for the world, and we’re giving them that chance.”

In what Robinson refers to as a “seller service,” the U.S. JNF contracts out forestry and reservoir-building to the KKL. It has also funded several small projects in the occupied territories, including a heritage museum in the Gush Etzion settlement bloc.

Robinson opposes the infighting within the major Zionist organisations and claims that it has had no effect on the fundraising of his party. Jacobs, however, says that Israelis should be worried about the fraying ties between their Hawkish government and their foreign allies.

“In the political life of the United States, American Jews are very involved,” he said. “We work overtime to bridge the differences and create more commonality, but to do so, we will not forsake our core obligations.”