Israel's Knesset on Wednesday voted down a bill that aimed at legalizing homes on the Ulpana Hill neighborhood in the West Bank settlement of Beit El, which were built on privately owned Palestinian land.

In a preliminary reading, 69 Knesset members voted against the bill, while 22 voted for it.

The vote was held a day after Prime Minister Benjamin Netanyahu announced that the government position was to oppose the bill, and threatened that any minister who supported it would be fired.

While discussions continued in the Israeli parliament, hundreds of supporters of the bill demonstrated nearby, blocking off roads in the area. Clashes broke out between the police and the protesters with at least eight of them being arrested. One of those arrested was activist Itamar Ben-Gvir.

Dozens of activists then proceeded to block roads in the entrance to Jerusalem.

The bill was geared to sanction illegal West Bank outposts in order to evade the need to demolish illegally built homes, such as those in the Ulpana Hill neighborhood of Beit El.

Foreign Minister Avigdor Lieberman announced Wednesday that his Yisrael Beiteinu party would vote with the government against the bill, and after Attorney General Yehuda Weinstein approved Netanyahu's alternative plan to remove the Ulpana neighborhood from Beit El and transfer the houses nearby to a former army base.

According to Netnayahu's plan, the five houses built on Palestinian land in Ulpana would be removed and relocated to the military territory in Beit El, 300 new housing units would be built on military territory in settlements, and a mechanism would be formed to deal with future Palestinian claims to land in petitions to the High Court.

MK Zevulun Orlev (National Religious Party), criticized the pressure that Netanyahu exerted on his ministers, saying "Apparently, the prime minister was and still remains Ehud Barak's soldier," to which Barak responded with an embarrassed grin.

MK Danny Danon (Likud) also criticized the Knesset's failure to pass the bill. "The people of Israel didn't vote for the evacuation of settlements or for Barak, the State of Israel is starting to pay for the marriage with Kadima."

On the other hand, MK Yoel Hasson (Kadima) said that "the decision proves that Kadima moves Netanyahu and his government to the center of the political map, pushing them away from the radical extremists."

Opposition leader MK Shelly Yachimovich (Labor) also said that Netanyahu did well to block the law.