JERUSALEM (BLOOMBERG) - Israel will allow Palestinians to build 1,000 homes in areas of the West Bank that are under full Israeli control, Ynet reported, citing unidentified Palestinians familiar with the decision, the first such decision in years.

       The news site said Israeli settlement leaders and the Palestinian Authority are engaged in an ongoing struggle over the construction of houses and other buildings in so-called Area C, with each side trying to establish facts on the ground.

       Ynet said Defence Minister Benny Gantz had approved the move.

       The report also comes as United States President Joe Biden's administration has been pushing Israel's new government and the Palestinian Authority to boost economic cooperation as a means to repair ties that suffered during the tenure of his predecessor Donald Trump, whose policies favoured Israel.

       The White House wants to strengthen the Palestinian Authority led by President Mahmoud Abbas and weaken rival Hamas, the Islamist militant movement that governs the Gaza Strip. Hamas' popularity surged among Palestinians after an 11-day conflict with Israel in May.

       Under the Oslo peace accords, the West Bank, captured by Israel from Jordan in the 1967 Middle East War, is divided into three categories with varying levels of Palestinian autonomy.

       Jewish settlements are concentrated in Area C, where Israel retains nearly exclusive control. Israeli negotiators have pressed to include the heavily settled areas as part of sovereign Israel under any peace agreement, with land swaps for the Palestinians elsewhere.

       The ruling Israeli coalition contains parties with clashing positions on territorial issues. Prime Minister Naftali Bennett's predominantly religious Yamina party wants to strengthen the state's Jewish character and annex West Bank land the Palestinians claim for a future state.

       Mr Bennett's key coalition partner and foreign minister, Mr Yair Lapid, takes a more moderate approach to peacemaking with the Palestinians, though diplomatic and security matters have not been at the centre of his attention.

       Their alliance also contains left-wing parties that advocate sweeping territorial concessions to the Palestinians in exchange for peace, and the United Arab List, the first Arab faction in government in Israel's 73-year history.

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