Once again, issues like the settlement "freeze" are dominating the official peace process, ignoring not only core questions like Israel's "matrix of control", but also the status of Palestinian citizens of Israel. While the increasingly overt racism of Knesset members has got its fair share of headlines, other important developments have escaped scrutiny outside the region.

Last month, Israeli prime minister Binyamin Netanyahu managed to pass legislation that introduces significant changes in how Israel's land is administered. The bill that eventually passed in the Knesset seeks to replace the Israel Lands Administration (ILA), which manages 93% of land in Israel, with a new Land Authority, and crucially, will allow for the privatisation of 200,000 acres (half by 2014). This change will "allow people to own their property outright, rather than lease it from the ILA".

For weeks, there was fierce political fighting, as supporters and opponents of the reform bill ramped up the rhetoric and made often strange-looking alliances in order to strengthen their bloc. While Netanyahu was selling the reform as a way to boost the economy, the discussion was by no means restricted to fiscal policy – environmental concerns, religion, and Zionism itself were all part of the intense arguments.

Palestinian citizens of Israel were also unhappy with the reforms, though the impact of the new Land Authority and its arrangements with the Jewish National Fund (JNF) on the country's marginalised minority was rarely central to the Knesset-focused debate. Yet there are important consequences for Palestinian refugees and Palestinians in Israel (including the "present absentees").

First, the privatisation means that land previously managed by the state after it was expropriated from Palestinians by past Israeli governments will become the property of private owners. This despite the fact that these mass expropriations were carried out ostensibly for a "public" purpose, and therefore should revert to their original owners once the original reason for the state's expropriation is no longer relevant.

The reform will also "lead to privatisation of property of some of the lands of destroyed and evacuated Arab villages, as well as many properties belonging to Palestinian refugees" – property currently held by the state's Custodian of Absentee Property. As Adalah, the Arab rights legal centre, put it, this privatisation of land "will lead to a total break of the link between the land and its original owner", while "the sale of absentees' property" is not only a breach of the Geneva convention, but also "contravenes" Israel's own Absentee Property Law.

Second, as part of the reform package, the JNF is exchanging land with the state, receiving land in the Negev and Galilee (though for the moment, the whole deal is being held up in the courts). This fits with the "Judaisation" strategy targeting these two regions which have high concentrations of Palestinians and Bedouins. In the words of the JNF's world chairman, "developing the Negev and the Galilee is the Zionism of the 21st century".

Given that the new Israel Land Authority will manage JNF lands "in a way that will preserve the principles" of a body whose self-defined "unique role" is as "owner of the eternal property of the Jewish people", it is not surprising that Arabs see this as yet another means of restricting their access to and control of land, in areas "crying out" for "development" and "fair planning".

Third, the land reform maintains the influence of the JNF at the highest level of Israel's land management. The new Lands Council will have six JNF members out of a total of 13, with "the Chairmen of the subcommittee and budget committee" selected from "among the JNF representatives". This means that the JNF has a significant role in shaping the nation's land policies – not simply the land it owns.

For Palestinians, the land reforms pushed through by Netanyahu's government have less to do with stimulating the economy than feeling like a continuation of the 1948 Nakba. Dr Yosef Jabareen, a lecturer at The Technion in Haifa, summarised the bill as a "neo-liberal economic vision, which focuses on the privatisation of public resources" converging "with the completion of Palestinian disinheritance". The real kind of reform needed is still a distant prospect.