Israeli Prime Minister Benjamin Netanyahu sought to sidestep strife in his right-wing coalition on Sunday by forming a committee to seek legal solutions to contested settlement projects.
The dispute centres on the government's policy on settlements in the occupied West Bank and its commitment to dismantle a number of unauthorised settler outposts in line with a supreme court ruling of August 2011.
The main point of contention is the Ulpana outpost which is slated for demolition by May 1.
Considered by some as a neighbourhood of nearby Beit El settlement, near Ramallah, Ulpana is built entirely on private Palestinian land. It is home to some 50 people.
An Israeli official, speaking on condition of anonymity, told AFP that Netanyahu on Sunday expressed hope that it would be possible to find a legal way for Ulpana to remain.
According to the official, the premier said he was working closely with the ministers of defence and justice to seek a solution.
On Saturday, Strategic Affairs Minister Moshe Yaalon warned that dismantling Ulpana was likely to bring down Netanyahu's coalition, which leans heavily on settlers and their supporters.
"We said we wouldn't evacuate the neighbourhood. Should this happen, the government will be break up," several Israeli media quoted Yaalon as saying.
Yaalon pointed the finger of blame squarely at Defence Minister Ehud Barak, whose ministry is responsible for setting up settlements -- and for their removal.
One of the main complaints by right-wing ministers and MPs against Barak is that his ministry has been slow to take the necessary steps to retroactively approve Ulpana -- a move which Netanyahu has been actively seeking.
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Barak said that if the outpost was built on private Palestinian land, there was no choice but to remove it.
"If it turns out that the homes were built on private land, there doesn't seem to be any other option than to evacuate them," he told public radio.
Hagit Ofran, of Israeli settlement watchdog Peace Now, said the debate proved ministers were trying to renege on the government's pledge to the supreme court.
"This internal debate within the government proves the fact that it is trying not to apply the court order," she told AFP.
At Sunday's weekly cabinet meeting, ministers had been expected to retroactively legalise three other settlement outposts in the West Bank: Bruchin, Sansana and Rechelim.
But instead Netanyahu announced the formation of the ministerial committee, composed of himself, Yaalon, Barak and minister without portfolio Benny Begin, the Israeli official said.
The official said that Bruchin, Rechelim and Sansana were all legally set up by government order.
"They are not outposts, but do have technical and procedural issues that have to be settled. For that reason the ministerial group has been established," he said.
Bruchin has around 350 residents and is located in the northern West Bank, along with Rechelim, which is home to around 240 people. Sansana, home to 240 people, is in the southern West Bank, near Hebron.
Israel considers settler outposts built without government approval to be illegal, but the international community views all settlements as illegal, whether approved by the government or not.