Jerusalem: Israel has proposed building a new Jewish settlement in the occupied West Bank near Jerusalem, a spokesman for the main settlers organization said on Monday.

The Defence Ministry, which oversees the issue, made no comment on a move that would be seen by Palestinians and by Israel's US and European allies as a breach of commitments to halt settlement activity on land Palestinians want for a state.

The Palestinians have already accused Israel of bad faith during the nine-month-old, US-sponsored Annapolis peace process for approving the expansion of other settlements, mostly near Jerusalem, and for last month giving the go-ahead for an entirely new settlement in the Jordan Valley.

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The settlers said officials made the new proposal as part of a deal to push them to quit a settlement outpost -- a hilltop collection of trailers that is home to more than 40 families and that was established without Israeli government authorization.

Ishai Hollander, spokesman for the settlers' YESHA council, confirmed a report in the Yedioth Ahronoth newspaper that defence officials had proposed moving several families from Migron, the unauthorized enclave, to another West Bank site.

Hollander told Reuters the settler council would meet this week to discuss ‘a proposal put by the Defence Ministry ... to build a permanent settlement of Migron nearby’ to the current site, on a hill near the Palestinian city of Ramallah.

Some half a million Israelis live among 2.5 million Palestinians in West Bank settlements ruled illegal by the World Court. Migron is one of the biggest of dozens of outposts that Israel itself considers unlawful.

Any new settlement would have to win Israeli cabinet approval. Israel has not built any new enclaves for years though it continues to expand existing settlements it says it wants to keep under any peace deal, despite international protests.

A Washington-sponsored ‘road map’ for peace, reaffirmed at the Annapolis summit last year, calls for Israel to freeze all settlement activity, viewed by the West as an obstacle to peace.

Hopes of agreement this year on a deal to establish a Palestinian state have faded since the meeting in November.

Israel had also pledged to its own high court, in response to a petition filed by an anti-settler group, to remove the Migron outpost by this month, after acknowledging it had been built on privately owned Palestinian land.

The plan to move these settlers to another site could delay the outpost's evacuation for years, since the inhabitants would probably stay on at least until homes in a new settlement are built, the Yedioth newspaper said.

In addition to what it regards as illegal outposts, Israel has built more than 100 officially sanctioned enclaves in occupied land that is home to about half a million Jews.

The government insists it will continue to expand existing settlements on West Bank land it has annexed to a Jerusalem municipality that Israel considers its capital - a view not endorsed internationally.

Palestinians say settlements and the military occupation that protects them strangle their economy and society and risk making any Palestinian state unworkable.