The Israeli government on Saturday night responded to the murder of five settlers in Itamar neighborhood by allowing the construction of about 500 new homes in settlements across the West Bank.

During Sunday's cabinet meeting, Israeli Prime Minister Benjamin Netanyahu blamed the Palestinian National Authority's tolerance of "incitement" for the Itamar tragedy.

"We expect much more unequivocal condemnation, but even more than that, we want to see unequivocal action by the Palestinian National Authority to stop allowing this incitement," Netanyahu said in a statement.

Despite the harsh criticism, local analysts said the incident would not bring about drastic changes in Israeli foreign policy, nor would it have major impact on Netanyahu's new initiative for Middle East peace process.

SECURITY COOPERATION TO CONTINUE

Dr. Shmuel Bar, director of studies at the Institute of Policy and Strategy in Herzliya, told Xinhua that the attack was not a one-time occasion and for each of these violent incidents, there are many other attempts being foiled.

"The relative quietness in recent years should not be seen as a policy change of the militant groups," Bar said.

Yaacov Bar Simon-Tov, professor of international relations at the Hebrew University, did not foresee any major policy changes due to the attack.

While the security issue is a higher priority in the negotiations after the deadly attack, it will not considerably setback the Israeli-Palestinian security cooperation, Bar Simon- Tov said.

He pointed out that the hunt for assailants is being coordinated between Israeli military and PNA forces.

The joint operations and intelligence sharing were once derided by Palestinians as treachery and by Israelis who saw Palestinian " catch-and-release" arrests as an "amateurish security theater" meant to impress the West.

Now, Israeli-Palestinian security collaboration has already made some impressive gains in thwarting plots and attacks against Israelis. Normally dour Israeli security officials have repeatedly praised their counterparts in Ramallah for finally "walking the walk" in attempting to stop attacks.

"There are a lot of signs that the cooperation between the two sides has improved in recent years," Bar Siman-Tov said.

UNCLEAR GOALS

Shlomo Brom, a senior research fellow and director for the program on Israel-Palestinian relations at the Institute for National Security Studies in Tel Aviv, said Israel's current policy towards the Mideast peace process is "unclear" and it would be hard to tell if the attack will seriously affect the policy.

Netanyahu and his advisors are currently preparing a new initiative aimed at restarting direct peace talks with the Palestinians and breaking the deadlock since September 2010 when Israel's ten-month freeze on settlement construction ended.

Netanyahu is preparing a trip to the United States in coming months and is expected to give a speech about the new initiative at a joint session of the U.S. Congress. The speech is labeled as "Bar-Ilan 2", named after a speech he gave at Bar-Ilan University in 2009, in which he for the first time gave backing to a two- state solution and acknowledged the right of the Palestinians to have an independent state. It's widely expected that the speech will outline Israel's long-term policy in the negotiations with the Palestinians.

"But he (Netanyahu) doesn't know what kind of initiative to present," Brom said, "If he really wants negotiations with the Palestinians, he shouldn't propose to them plans that the Palestinians will not agree to, like the idea of an interim agreement."

The deadly attack will have negative effect on the public attitude towards the peace talks in Israel, "but there will not be a serious impact on Israel's foreign policy if it's not followed by more similar attacks," Brom said.