Prime Minister Netanyahu also agrees to calls for building settlements in response to attacks against Israeli citizens
Israel's Prime Minister Benjamin Netanyahu said ministers would grant formal authorisation on Sunday to a rogue West Bank settlement in response to the murder last month of a rabbi who lived there.
The announcement came amid heightened tensions after Israeli soldiers shot dead a Palestinian teenager during an arrest raid to capture the rabbi's killers in the village of Burqin in the occupied West Bank.
"The government will today regularise the status of Havat Gilad to allow the continuance of normal life there," Netanyahu said at the start of the weekly cabinet meeting, referring to the wildcat settlement in the occupied West Bank.
'Netanyahu is trying to make facts on ground. All settlements in the West Bank, including in Jerusalem, are illegal'
- Wasel Abu Youssef, PLO politician
Israeli settlements are seen as illegal under international law and major obstacles to peace as they are built on land the Palestinians see as part of their future state, but Israel differentiates between settlements it has approved and those it has not.
Those without approval are referred to as outposts and tend to be populated by hardline religious nationalists who see the entire West Bank as part of Israel.
The official cabinet agenda says ministers will hear a motion to designate the 15-year-old outpost as a "new community" which will have the necessary building permits and a state budget.
Some 50 families live in the illegal outpost.
Palestinian officials condemned the move.
"Netanyahu is trying to make facts on ground. All settlements in the West Bank, including in Jerusalem, are illegal," said Wasel Abu Youssef, a member of the Palestine Liberation Organization's executive committee.
In January, Rabbi Raziel Shevah was shot dead near Havat Gilad, a wildcat illegal Israeli settlement in the Nablus area.
The following week, Israeli troops searching for his attackers shot dead what they described as a Palestinian suspect in the city of Jenin in the northern West Bank, about 35km north of Havat Gilad.
They did not, however, catch the man considered to have led the attack on Shevah, 22-year-old Ahmed Jarrar.
The manhunt continued on Saturday with a raid on the village of Burqin. In clashes that erupted there, soldiers shot dead a teenager identified by the Palestinian health ministry as Ahmad Abu Obeid, 19.
At Shevah's funeral, there were calls for "revenge" during a speech by Education Minister Naftali Bennett of the far-right Jewish Home party.
Bennett responded by saying that the only revenge should be in building more settlements, and Netanyahu said on Sunday that was one of the planks of his policy.
"Anyone who thinks that through the abominable murder of a resident of Havat Gilad, a father of six, they would break our spirits ... is making a bitter mistake," he said.