07 February, 2017
The so-called outpost bill is due to be brought to a final vote in the Knesset on Monday evening, the Times of Israel reported.
Britain has long opposed the policy of settlement building on occupied Palestinian land, believing it to be a barrier to peace.
Netanyahu himself did not attend the vote because he was on a plane back from London when it was held.
At the start of their meeting, May told Netanyahu that the British government is committed to a two-state solution to the Israeli-Palestinian conflict. Opposing the law would have risked alienating his supporters and ceding ground to Jewish Home.
The Knesset can not pick and choose which parts of worldwide law it likes and which it does not regarding the West Bank, Deputy Attorney-General for global Affairs Roy Schondorf told the joint Knesset committees handling the Settlement Bill in a classified briefing last month, which was only declassified Monday.
Israeli Attorney-General Avichai Mandelblit has described the law as unconstitutional and a breach of worldwide law since it allows expropriation of private land in areas Israel seized in the 1967 Middle East war. While enabling settlers to keep the land, it sets up a compensation system in which Palestinians would either receive alternative properties or annual payments at above-market prices. On Monday, the Israeli leader said he had informed the Trump White House that a vote on the legislation was imminent. The outpost was found to be built on private Palestinian land and the Israeli Supreme Court ordered it demolished.
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The bill could still be challenged, with Defence Minister Avigdor Lieberman saying last week: "The chance that it will be struck down by the Supreme Court is 100 percent".
If adopted into law, it will have far reaching legal consequences for Israel and greatly diminish the prospects for Arab-Israeli peace.
Settlements are illegal under worldwide law and, as outlined in the Middle East Quartet report, present one of the main impediments to peace.
Since Trump's inauguration, Israel has announced more than 6,000 new homes in the West Bank and east Jerusalem, seen as key parts of any future Palestinian state.
The White House statement was interpreted as a message to Netanyahu and his government that the U.S. administration meant to reserve its options. "He can simply turn around and say, "I tried my hardest".
"The law passed by the Knesset today proves yet again that Israel has no intention of ending its control over the Palestinians or its theft of their land", the group said in a statement.