The Israeli press reported on Monday that Ariel Sharon made the approach to The Jewish Agency, which is committed to assuring the future of the Jewish citizens of Israel.
But Palestinian residents of the areas, which are known in Arabic as al-Naqab and al-Jalil, fear the move will come at their expense.
Land confiscation and forced resident evacuation orders have already been issued to two of al-Naqab's villages, Um al-Hiran and al-Sadir, in order to make room for a new Jewish settlement there.
Last Monday, Israeli forces, who were in the process of carrying out the order, clashed with Palestinian demonstrators, injuring several people in the process.
Arab Knesset member and resident of al-Naqab Talab El-Sana intervened and was able to prevent the land confiscation temporarily.
"The Israeli government takes advantage of every opportunity it gets to continue tightening the noose around the Arab communities in Israel by destroying their villages, confiscating their lands and transferring them out," said El-Sana in an interview with Aljazeera.net.
"The Israeli government takes advantage of every opportunity its gets to continue tightening the noose around the Arab communities in Israel
by destroying their villages, confiscating their lands and transferring them out"
Arab Knesset member
"In a time of war it transfers Palestinians from the Naqab with the excuse that these are 'military lands'. And during times of peace, it does the same with the excuse that they need the lands for public works projects and the like. These attacks targets what is left of the Arab lands of 1948."
The head of the Regional Council of Unrecognised Villages in the Naqab, Husayn al-Rafaya, was briefly detained during the confrontation.
Al-Rafaya says the Arab-Israel peace processes have come come at the expense of the Arab residents in the south.
Following the the implementation of the Camp David Accords between Egypt and Israel in the early 1980s, for example, more than 8000 sq km of land in the Bhaira region in the Naqab were confiscated, and its residents forcibly evacuated.
Ariel Sharon is the architect of
Israel's settlement programme
The lands were used to relocate Israeli military airports from the formerly occupied Sinai Peninsula.
Al-Rafaya fears that a similar fate awaits them following the planned Israeli pullout from the Gaza Strip.
"We are afraid. I see that Sharon wants to take advantage of this situation and forcibly transfer the people of the south from their lands, and today he has a wonderful opportunity to do this, to take the settlers and move them in our lands in the south," he said.
Ninety-eight per cent of the Palestinian lands in the Naqab have been confiscated by Israeli forces since 1948.
Al-Rafaya says the Israeli settlement building policy is such that there need not necessarily be people living in the illegal colonies, so long as settlements are being built.
"Let's not forget, Israel owns vast amounts of land taken from
Palestinians in the Naqab since 1948. They can build settlements there, but they choose not to. Instead, they come and put them on Arab lands so they transfer the people out."
Murad al-Sana, a lawyer with Adaleh, the Legal Centre for Arab Minority Rights in Israel, voiced similar concerns.
"What we are afraid of is that Sharon will destroy the 45 remaining villages there and transfer their residents elsewhere so they can bring in settlers from Gaza and elsewhere," he said.
"Despite all the state's declarations to the contrary, it still
discriminates very clearly against the Arab citizens who make up more than 20% of the population, especially those in the Naqab, and denies them the most basic human right - the right to shelter"
"Despite all the state's declarations to the contrary, it still discriminates very clearly against the Arab citizens who make up more than 20% of the population, especially those in the Naqab, and denies them the most basic human right - the right to shelter."
There are more than 70,000 Palestinian Arabs living in sites not recognised by Israel as residential communities, according to the 1956 Israeli Planning and Construction Law.
Thousands of homes in these areas are subject to demolition and confiscation following a recommendation from the Israeli Markovitch Commission in 1987.