| Netanyahu has so far refused to halt settlement expansion despite US pressure [EPA]
The expansion of Jewish settlements in the occupied West Bank and east Jerusalem has stalled peace talks between Israel and the Palestinians and sits at the heart of a rift between the US and Israel.
Who are the settlers?
About 500,000 Jews live on land in the West Bank and east Jerusalem seized by Israel in the aftermath of 1967 Israeli-Arab war.
Most live in the more than 120 government-supported settlements, some of which have populations of tens of thousands, that fall directly under Israeli control.
Others live in hundreds of so-called outlying outposts, often little more than temporary buildings or trailers with no proper links to services such as water and electricity.
Some settlers, particularly in east Jerusalem and in the settlements on its outskirts, move in because of cheaper housing costs. But others see themselves as pioneers forging a "Greater Israel".
They believe that Jews have a religious claim on the West Bank, which they call Judea and Samaria.
In the Israeli media, the settlements are frequently referred to with the Hebrew term "hitnakhluyot", which evokes biblical injunctions and promises to "inherit" the land through settlement.
Are the settlements legal?
The United Nations, World Court and European Union have all deemed both the official settlements and the outposts to be illegal under international laws, including the Geneva Conventions, which set out the basis for international humanitarian law.
After Israel's seizure of West Bank and Gaza Strip in 1967, the UN Security Council said the "Geneva Convention relative to the Protection of Civilian Persons in Time of War, of 12 August 1949, is applicable to the Arab territories occupied by Israel since 1967, including Jerusalem".
However, it was only in Resolution 446 on March 22, 1979, that the Security Council officially stated that it believed the settlements were illegal.
"... the policy and practises of Israel in establishing settlements in the Palestinian and other Arab territories occupied since 1967 have no legal validity and constitute a serious obstruction to achieving a comprehensive, just and lasting peace in the Middle East," it stated.
Israel considers the official settlements to be legal and provides them with amenities.
But in January 2009, Yesh Din, an Israeli human-rights group which monitors settlement activity, published a leaked report that suggested 75 per cent of West Bank settlements were constructed without proper permits.
Israel does consider the so-called outposts illegal as they have not been granted planning permission by the Israeli state.
Ehud Barak, Israel's defence minister, has said that the authorities will dismantle more than two dozen of the outposts after consultations with settlement leaders.
Under the so-called road map, which sets a framework for moving toward peace with the Palestinians, Israel agreed to halt all settlement activity.
It also committed to destroying all the so-called outposts set up since 2001. Israel's Peace Now organisation estimates that about 50 outposts have been set up in that time.
What impact do the settlements have on Palestinians?
Palestinians want the land seized by the Israelis as part of any future independent state and say that the settlements threaten access to east Jerusalem and divide the north and south of the West Bank.
The settlements and the Israeli security measures that protect them, including the security barrier and checkpoints, disrupt the Palestinian economy as they restrict access to areas of the territory.
The West Bank-based Palestinian government of Mahmoud Abbas, the president, has said it will not resume peace talks with Israel until all settlement construction is frozen.
Israel has previously suggested drawing up the borders of any future separate state to leave the majority of settlements inside Israel and giving the Palestinians an equivalent amount of land elsewhere.
Israel's Haaretz newspaper reported in 2008 that up to one-third of West Bank settlements were built on land that had been temporarily seized by the military for security purposes.
The report reveals that some settlements deemed legal by Israel are in part effectively illegal outposts and that large portions of some, including Ofra, Elon Moreh and Beit El, were built on private Palestinian land.
Amnesty International has argued the settlement policy violates Palestinian human rights.
"As well as violating international humanitarian law per se, the implementation of Israel's settlement policy in the Occupied Territories violates fundamental human rights provisions, including the prohibition of discrimination," it said in a report in 2005.
"The seizure and appropriations of land for Israeli settlements, bypass roads and related infrastructure and discriminatory allocation of other vital resources, including water, have had a devastating impact on the fundamental rights of the local Palestinian population."
Human Rights Watch and other rights groups have documented violence against Palestinians by settlers, including "frequent stoning and shooting at Palestinian cars".
"In many cases, settlers abuse Palestinians in front of Israeli soldiers or police with little interference from the authorities," it said.
Why does the Israeli government not halt settlement activity?
Most coalition governments depend to some degree on pro-settler parties or settler votes for power and isolating them would place their government in jeopardy.
The government of Binyamin Netanyahu, the Israeli prime minister, has said that construction needs to continue in established settlements to cope with the "natural growth" of their populations.
Critics charges that Israel maintains the settlements to influence any future agreement on a two-state solution with the Palestinians.
All settlements in the Gaza Strip were abandoned in 2005 and about 8,000 settlers were forcibly evicted.