According to the Gush Emunim movement, Shilo was considered a potential site for a settlement as early as 1974. In January 1978, a modern community was established adjacent to the ancient biblical site, Tel Shilo.[4] According to ARIJ, in order to construct Shilo, Israel confiscated land from two neighbouring Palestinian villages/towns, including 752 dunams from Turmus Ayya,[5]
and 635 dunams from Qaryut.[6] In 1979, Shilo was officially included in the list of settlements under the Jurisdiction of the Settlement Section of the Jewish Agency.[4] The village is administrated by the Mateh Binyamin Regional Council.
The ownership of the land that makes up Shilo is disputed. Settlers and the Israeli government claim that the settlement is built entirely on state land, owned by the state in 1967 or reverted to it because the owners had fled. Peace Now and local Palestinians claim that more than a quarter of Shilo is built on land privately owned by Palestinians.[7] Shilo was cited by Oslo Peace Accords negotiator Yossi Beilin as an example of an area that should be transferred to Palestinian control due to its location in a densely populated Palestinian area."[8]
On 27 November 2011, the Israeli Defense Ministry approved two plans for 119 new housing units built in Shilo, which would expand the settlement by 60%. The approval came as a response to a petition by Peace Now to the Israeli Supreme Court filed eight months before after construction began on 40 new housing units.[9]
In February 2012 the Israeli government approved the construction of new housing units in Shilo. The approval of new and existing construction was condemned by the High Representative of the Union for Foreign Affairs and Security Policy of the European Union, Catherine Ashton, as a "provocative action" contrary to international law and Israel's obligations under the Quartet Roadmap, which states that "Israel should not only freeze all settlement activity, but also dismantle those settlements erected since March 2001."[10]
On 7 April 2015, a 32-year-old Palestinian man stabbed two Israeli army paramedics, one of whom was seriously injured. He was shot dead at the entrance to the settlement after his attack.[11]
Recently, Shilo has become a hub for Israeli settler violence, with several attacks being staged on the neighboring Palestinian town of Turmus Ayya. One of the most serious took place on 21 June 2023, when, in retaliation for the killing of four Israeli civilians, hundreds of masked settlers firebombed the town, killing one Palestinian.[12][13] Further attacks took place throughout July 2024, with farmhouses and generators getting burned down.[14]