According to the Geneva Conventions, when Israel allows settlement in the “occupied” West Bank, it constitute a war crime. Israel claims that the area is not occupied but “disputed”, and therefore the Conventions do not apply. The UN considers the territory as “occupied”, making all Israeli settlements illegal.
It’s a matter of who blinks first. The Palestinians will not negotiate peace as long as there are Israeli settlements in the West Bank. The Israelis will not remove the settlements until there is a peace treaty.
The below website at Wikipedia gives a good synopsis.
http://en.wikipedia.org/wiki/Israeli-occupied_territories





