The two sanctioned outposts were listed as Moshes Farm, also known as Tirza Valley Farm Outpost, and Zvis Farm. Both are considered illegal outposts under Israeli law, which differ from other West Bank settlements that have government authorization.

Three Israeli citizens were also individually placed on the Office of Foreign Assets Control’s list of sanctioned entities: Zvi Bar Yosef, 31; Neriya Ben Pazi, 30; and Moshe Sharvit, 29.

All three men have been linked to violence against Palestinians in media reports. The State Department said Bar Yosef has engaged in “repeated violence and attempts to engage in violence against Palestinians in the West Bank,” while both Ben Pazi and Sharvit have used threats and violence to expel Palestinians from their land.

The sanctions block access to U.S. property or assets and prohibit financial institutions from working with those targeted. After the United States announced sanctions on four settlers in February, Israeli banks said they would comply with the sanctions, and the settlers told Israeli media that their accounts had been frozen, despite complaints from far-right Israeli ministers.

Bezalel Smotrich, the finance minister in Prime Minister Benjamin Netanyahu’s government and a prominent far-right, pro-settler voice, said Thursday that the Israeli government would fight any sanctions.

“The Israeli government stands behind the settlements, and these steps are totally unacceptable and we will fight to cancel them,” Smotrich said in a statement.

The U.S. move comes amid rising tensions between the Biden administration and the Netanyahu government over not just the continued violence perpetrated by Israeli settlers in the West Bank, but also the escalating humanitarian crisis in Gaza, where at least 31,341 people have been killed since the war began, according to the Gaza Health Ministry.

President Biden warned last weekend that an Israeli ground offensive in Rafah, a southern city in Gaza now overflowing with civilians who have fled other parts of the enclave, would be a “red line” for the United States, without specifying how he would respond.

On Thursday, Israel Defense Forces spokesman Daniel Hagari said that the Israeli military intended to direct a “significant” portion of Rafah’s population of 1.4 million toward “humanitarian islands” in central Gaza, adding that Israel intended to “flood” Gaza with aid.

U.S. officials who spoke on the condition of anonymity to discuss private conversations said there are no signs that Israel has serious planning underway for a Rafah invasion in the immediate future. One senior administration official said Israeli leaders were, in part, using the threat of a Rafah invasion to pressure Hamas to accept a six-week cease-fire deal that would see the release of the remaining Israeli hostages.

But Biden officials note it is not just Netanyahu who wants to invade the southern Gaza city. There is widespread support for a Rafah military operation across the Israeli government, the senior official said, adding that when Netanyahu’s chief rival, Benny Gantz, visited Washington earlier this month, he expressed a strong desire to press ahead.

“Our position has not changed,” White House National Security Council spokesman John Kirby told reporters on Thursday. “We do not want to see large-scale operations in Rafah unless there is a credible, legitimate, executable plan to provide for the safety and security of the civilians that are there.”

The sanctions coincided with a Thursday speech by Senate Majority Leader Charles E. Schumer (D-N.Y.), a prominent supporter of Israel and the highest-ranking Jewish official in the United States, in which the senator warned that Israel risked becoming a “pariah” — in part due to Netanyahu’s ruling right-wing coalition. Schumer called for new elections “once the war starts to wind down.”

Smotrich, who leads the far-right Religious Zionist Party, hit back at the Biden administration on Thursday, claiming it had surrendered to international boycott, divestment and sanctions (BDS) campaigns that were “designed to blacken the entire State of Israel and lead to the elimination of the settlement enterprise and the establishment of a Palestinian terrorist state.”

Another far-right cabinet member, National Security Minister Itamar Ben Gvir, said that the sanctions showed the United States did not know “who is an enemy and who is a friend.”

Ben Gvir, leader of the ultranationalist party Jewish Power and a West Bank settler himself, wrote on the social platform X that settlers bring security to Israel and that they deserved “a salute, not a knife in the back.”

Peace Now, an Israeli advocacy group that tracks and opposes West Bank settlements, meanwhile, welcomed the new sanctions, saying it was time for the settlements to pay for “their violence and systematic criminality” in a post on X.

Violence has flared in the West Bank since the Oct. 7 attack on Israel, which sparked the ongoing war in Gaza. Yesh Din, a human rights group, called 2023 the “most violent year in settler violence against Palestinians in the West Bank in both the number of incidents and their severity,” with a particular spike in violence in the two months after the attack on Israel.

As many as 700,000 Israeli settlers live in the West Bank, spread across 279 settlements, according to estimates from the United Nations. On March 6, Israel’s settlements minister wrote on X that plans to construct 3,500 additional settlement homes were progressing, sparking condemnation from United Nations officials and some world leaders.

Thursday’s sanctions were issued under an executive order signed by Biden in February that allowed the United States to target people who undermined peace, security and stability in the West Bank and hurt U.S. foreign policy objectives, including a two-state solution. Four individual Israeli settlers were placed on the sanctions list at that time.

The executive order was just one sign of administration pressure on Israeli settlements. Later in February, Secretary of State Antony Blinken announced a reversal of the previous administration’s position on Israeli settlements in the West Bank, calling them “inconsistent with international law” and stating that they weaken Israeli security.

Riyad Mansour, the Palestinian envoy to the United Nations, said at a meeting this week that sanctions on individual settlers were not enough and that all settlers and settlements needed to be targeted. “The entire enterprise of settlements and settlers should be sanctioned — don’t allow a single of one of them to get a visa to visit any of your countries,” Mansour told the United Nations.

Lior Soroka, Yasmeen Abutaleb and Karen DeYoung contributed to this report.