Way back in 1978, things looked guardedly optimistic:-
Reply in the Knesset by Deputy Defence Minister Zippori on settlements, 3 February 1978
During the last week of January...in Israel, a major debate was taking place on the future of the settlements, both in Sinai and in the West Bank, where a Gush Emunim group settled at an archaeological site near Shiloh. In a reply to a motion for the agenda, Deputy, Defence Minister Zippori said that the government settlement policy was to bolster existing settlements as well as establishing new ones. On the Shiloh settlements, he said that Gush Emunim would help in the excavations at Shiloh. Text:
1. So far no discussion had been held by the governments of Israel, and no proposal has been put forward on giving up or abandoning any settlements in any area whatsoever. On the contrary. Intensive activity is being carried out by the settlement institutions with a view to bolstering existing settlements and establishing new ones throughout the area of the country.
2. On the subject of Shiloh: In response to a specific request from an authoritative professional factor, and after funds were allocated by the Ministry of Education, the Defence Ministry approved the setting up of a camp for the archaeological mission to work at the site in the digging season. The factor responsible for the dig decided to make use of the services of the Gush Emunim settlement group that wishes to set up its home at this site. We see nothing wrong with this wish on the specific condition - and this has been stressed to all those concerned - that implementation of the archaeological dig is no substitute for the need for a cabinet decision over the establishment of any new settlement, so long as no such decision has been taken, no settlement will be established.
and on Feb. 12, the Cabinet declared:
The government of Israel stands by its view that the Israeli settlement program is in full harmony with international law and that it always has been legal, legitimate and essential. The United States holds a different viewpoint. However, no communication was transmitted to us, even during the seven weeks after having forwarded on December 27, 1977 the full text of the peace plan in writing to the government of the United States that the settlements "Should not exist."
this was based on Menachem Begin's view:
On the question of the settlements, there is but one proposal: The government of the United States and the government of Israel agree to disagree. The United States government says our settlements contradict international law. The Israel government says: We have examined international law, we have perused it - including Article 49 of the Fourth Geneva Convention - and we assert that the settlements are fully in accord with international law. The United States government says: The settlements are illegal, the Israel government says: The settlements are absolutely legal... that is the fact: There are between the government of the United States and the government of Israel differences of opinion on this question, and we must agree that, on this issue, we disagree.
and this statement from FM Moshe Dayan on Feb. 26:
"The policy of this government is not to establish new settlements [in Sinai]. No new settlements have been established. The Cabinet's most recent resolution repeated this policy of refraining from establishing new settlements while strengthening existing ones. If immigrants wish to settle in Yamit they may do so. If there is room in a settlement for 80 families and there are only 60, there is no reason not to add another 20, and if more water is required, we shall provide more water.
"It was decided at the time to establish three settlement within the framework of IDF camps in Judea and Samaria. One of these has been established, and the Cabinet decided not to annul its resolution regarding the other two, which will be established when the time comes."