In the fraught atmosphere of the Israeli-occupied West Bank, an approaching decision on whether to award coveted university status to a college has taken on powerful political overtones.

For critics of Israel's policy of settling Jews in the West Bank, the upgrade of the "Ariel University Center of Samaria" into a permanent university would be a strong signal of what they say is creeping annexation of the hilly territory.

For its supporters, upgrading the institution will be a crowning jewel of the government's commitment to holding the West Bank, the heartland of biblical Judaism, captured by Israel along with east Jerusalem in the 1967 war.

"Most dramatically, this has a symbolic significance that no settlement has," said political scientist Yaron Ezrahi of Hebrew University. "It's an attempt to legitimize the occupation."

Of Israel's more than 120 Jewish settlements, Ariel holds special significance.

With 19,000 people, it is one of the largest settlements built on occupied territory claimed by the Palestinians. Positioned deep in the West Bank, its removal is seen as essential to the viability of a future Palestinian state, since annexing it to Israel would also take a significant wedge of land with it to connect with Israel proper.

But its huge population and developed infrastructure, including a theater, sports complex and four-lane highway, would make it extraordinarily difficult to uproot. An upgrade to the college would give a symbolic depth to the feeling of permanence.

"Ariel is here to stay. There's no reason to treat it differently from Tel Aviv," said settler leader Naftali Bennett. "Long ago, it should have become a university."

A government committee headed by the education minister is expected to decide next month on the upgrade.

The Ariel institution has operated for 30 years in some form, ultimately growing into a college of some 12,500 students. It is open to all Israeli citizens, including Arabs. But like other Israeli universities, it is closed to the 2.5 million Palestinians in the West Bank.

The school was given temporary university status five years ago, according to school officials, with a July 15, 2012, deadline to make a decision on giving it permanent recognition. In the meantime, its faculty was tasked with proving that it could produce university-worthy education.

Permanent status would give the institution access to additional state funding and allow more collaborative work with other Israeli universities. Most critically, though, it would be a symbolic victory in the school's struggle for recognition.

Israel Education Minister Gideon Saar favors the upgrade, according to his spokeswoman, Lital Apter-Yotzer. She said he would support the application as long as it meets academic requirements and doesn't take away existing funding for the country's other universities.

"From the academic point of view, we are eligible to get permanent status as a university," Yigal Cohen-Orgad, the school's dean, said proudly.

But the decision will not rest on academic considerations alone: An upgrade would likely trigger international condemnations and enrage the Palestinians.

Most of the international community considers the settlements illegitimate and a chief obstacle to Palestinian statehood.

"Any step of this kind would be a further consolidation of illegal settlements," said Palestinian spokesman Ghassan Khatib.

Settlements are at the heart of the current impasse in Mideast peace efforts. Talks broke down more than three years ago, and the Palestinians have refused to return to negotiations while Israel continues expanding its settlements. More than 500,000 Israelis now live in the West Bank and east Jerusalem, claimed by the Palestinians.

Joining Israeli academia would put the Ariel school in some prominent company. All but one of Israel's eight universities rank in the world's top 500, according to the Academic Ranking of World Universities, a respected ranking service.

But some, including professors at other Israeli universities, fear it will tarnish Israeli academia and perhaps jeopardize international funding, staff and research exchanges.

Pro-Palestinian activists say if the institution is recognized, they will push harder than ever for a boycott of Israeli academia by firmly demonstrating links between the country's military occupation and academia.

The symbolism of a university, the activists say, is more powerful than a mere college."It will open the doors even more widely to the general boycott of Israel and all its institutions that are part of its system of oppression," said Omar Bargouti, a Palestinian activist in the global movement to promote boycotts and sanctions against Israel.

The movement's chief concrete success so far was to influence the University of Johannesburg in South Africa to cut its institutional agreements to Israel's Ben Gurion University in March 2011. It has also promoted boycott debates onto Western campuses.

A petition condemning the upgrade plans drew some 1,000 signatures from Israeli academics, said Nir Gov, associate professor of chemical physics at Israel's Weizmann Institute of Science, and a sharp critic of Israel's policies against Palestinians.

Academics fear tens of millions of dollars of European and U.S. research grants might be at stake if they are compelled to work with a future Ariel University.

They cite the case of Israeli theater companies that were forced to perform in Ariel's year-old theater. At that time, hundreds of artists protested against the move, saying they did not agree with Israel's settlement policy. The culture minister responded by threatening to cut the funds of any theater company that did not comply.

The European Union will not fund projects based out of West Bank settlements, said EU spokesman David Kriss. A U.S. spokesperson did not comment.

Even if there is no official boycott, Israeli academics may be less likely to be accepted at international conferences, their scholarly articles could be rejected, and so could their applications for sabbaticals in prestigious universities abroad, said Menahem Klein, political science professor at Bar Ilan University.

"Of course it will not happen overnight," Klein said. "It might take a few years, but ... it may lead to very bad consequences for Israeli universities. This will make a connection between academia and occupation."