1. The status of Israeli settlements under international law is frequently misrepresented

Before turning to the specific issue of the settlements, it is instructive to recall that Israel entered the West Bank in a war of self-defense in June 1967, so that the UN Security Council did not call on Israel to withdraw from all the territory that it captured, taking into account its need for "secure boundaries," in UN Security Council Resolution 242 that was adopted in November 1967. The previous occupant in the West Bank from 1949 to 1967 had been the Hashemite Kingdom of Jordan, whose sovereignty in the territory the entire international community refused to recognize – except for Britain and Pakistan. Prior to 1949, the governing document for legal rights in the West Bank was the 1922 Palestine Mandate, which gave international recognition to Jewish legal rights.
 
International jurists were cognizant of these considerations. Despite the claim that settlements are illegal, Eugene Rostow, a former dean of Yale Law School who was also Undersecretary of State in the Lyndon B. Johnson administration, would write in 1983 that “Israel has an unassailable legal right to establish settlements in the West Bank.” He argued that Israel’s claims to the territory were “at least as good as those of Jordan.” Prof. Stephen Schwebel, who would become the State Department legal advisor and subsequently the President of the International Court of Justice in The Hague, went a step further when he wrote in 1970 that “Israel has better title in the territory of what was Palestine, including the whole of Jerusalem, than do Jordan and Egypt.” 
 
The question about the legality of settlements came from how various legal authorities interpret the applicability of the 1949 Fourth Geneva Convention relative to civilian persons in times of war. Article 49 of the convention clearly prohibits “mass forcible transfers” of protected persons from occupied territories. Later in the article, it states that “the occupying power shall not deport or transfer parts of its own civilian population into the territory it occupies.” American interpretations of this article maintained that it referred to forcible deportations that were practiced by the Nazis and not to Israeli settlement activity. During the administration of the first President Bush, the U.S. ambassador to the UN in Geneva, Morris Abram, explained that he had been on the U.S. staff during the Nuremberg trials and was hence familiar with the “legislative intent” behind the Fourth Geneva Convention. He stated in February 1990 that it applied to forcible transfers and not to the case of Israeli settlements.
See also: "Israeli Settlements and International Law"   
 
2. Israeli offers of territorial compromise are rejected or ignored

Israelis are deeply committed to achieving peace with all of their neighbors, including the Palestinians. 
To achieve this goal, PM Netanyahu has repeatedly expressed his commitment to immediately renew direct negotiations without preconditions. These offers, as in the other numerous proposals made since 1967, most recently in 2000 in Camp David, in 2001 in Taba and in 2008 by PM Olmert, included Israel making painful territorial compromises in the West Bank and Gaza Strip. Every single one was rejected or ignored by the Palestinian leadership. 

If the primary issue truly was settlement activity in the territories, the Palestinians could have solved it by negotiating the Israeli offers. A peace agreement acceptable to both sides could long have been reached and a Palestinian state would have been established more than a decade ago.

3. Israel’s commitment to peace is proven by its actions

To achieve peace, Israel has not only stated its willingness to make painful concessions, including territorial compromises, but has proven it with actions of goodwill and of actual withdrawal time and again: 

 4. Many issues have to be resolved, not just settlements

Settlements are only one of the many difficult and complicated issues that will have to be determined by direct negotiations between Israel and the PA before a genuine, lasting peace agreement can be reached. Israel is willing to discuss all disputed matters (such as the final borders, security arrangements, the status of refugees from both sides and more). 

 The PA has signed agreements, such as the Oslo Accords, that state that all fundamental issues - including vitally important security arrangements - are to be negotiated. Moreover, the PA agreed that until an agreement is reached, no limitations were to be placed on settlement construction (nor on Palestinian construction in the territories under its administration). In the past, negotiations did continue between Israel and the PA while construction was ongoing. 

5. Palestinian terrorism started before, not after, the construction of the first Israeli settlement 

Palestinian terrorism and violence started well before 1967 and the revival of Jewish communities in the West Bank and Gaza. 
Indeed, attacks against Jews preceded the establishment of the State of Israel in 1948, including during the anti-Jewish riots of 1920-21, the 1929 Hebron Massacre and riots and the Arab Revolt of 1936-38. The first war to destroy Israel began before the state was declared in 1948 with an intensified campaign of Palestinian terrorism on the eve of the UN Partition Resolution of 1947.  

The Palestinian Liberation Organization (PLO) was established in 1964, three years before Israel gained control over the West Bank and Gaza in a war of self-defense. It was one of the most violent, brutal terrorist organizations the world had ever seen and PLO bombings, plane hijackings and other murderous attacks on innocent civilians around the globe inspired many of today’s terrorists.  

Palestinian terrorism continued even after the start of the peace process and the signing of the Oslo Accords that gave the PA political control over the lives of approximately 96% of West Bank Palestinians and 100% of the Palestinian residents of the Gaza Strip. 

In September 2000, Palestinian terror intensified into the Second Intifada after Israel’s offers of a Palestinian state made during the negotiations in Camp David (2000) and Taba (2001) were rejected by the Palestinian leadership. That terrorism continues today, despite the best efforts of the Israeli government to return to direct negotiations.  

6. Settlements will not block the viability of a Palestinian state 

Corresponding to the false claim that Israeli communities are an obstacle to peace is the erroneous allegation that settlements constitute a physical block to the possible establishment of a viable Palestinian state.

Independent analyses show that the built-up areas of settlements cover only a tiny percentage the West Bank's total territory.
Moreover, a vast majority of Jewish residents of the West Bank live in the major settlement blocs that mostly border Israel. Previous efforts to negotiate two states for two peoples have acknowledged this reality and rejected a return to the armistice lines of 1949 (the so-called ’67 borders). Instead, a realistic, lasting final status agreement would be reached on the basis of mutually-agreed land swaps that reflect reality and answer the mutual security needs of both sides.  

7. Israel has legitimate rights and genuine security needs in the West Bank 

 Absent from much of the debate surrounding this issue is consideration of Israeli rights, needs and the genuine threats to its safety, in particular in view of the rise of radical elements in the region such as ISIS, al-Qaeda and Hizbullah. 

The long history of painful attacks on Israel and Israeli citizens – including by terrorists from the West Bank between 1949 and 1967, which claimed over 1,000 victims - has proven that Israel needs and deserves secure, defensible and recognized borders. This fact has been repeatedly acknowledged in international decisions on the conflict, including the fundamental post-1967 UN Security Council Resolutions, 242 and 338.
The thousands of years of Jewish history in the West Bank also should not be ignored. The West Bank – or as it is more accurately called, Judea and Samaria – was a center of Jewish life and the location of many of the most holy sites in Judaism. 

Yet by the end of the War of Independence, this area had been ethnically-cleansed of every Jew and from 1948-1967, for the first time in a thousand years, Jews were barred from living in Judea and Samaria and in the Old City of Jerusalem. Thriving communities, such as those in the Gush Etzion bloc south of Jerusalem, and Neve Yaakov and Atarot in the north were destroyed in 1948, while the thousands of years of Jewish presence in biblical Hebron ended with a massacre in 1929. 

While Israel is prepared to make painful compromises for peace, the magnitude of that sacrifice should be acknowledged.  

Conclusions
The settlements are indeed a standing issue to be negotiated, together with other disputed issues, such as the final borders, security arrangements and the status of refugees from both sides.  

But the Israeli government, as the democratically elected representative of the Israeli people, still firmly believes that peace is achievable if both sides are willing to talk to each other and if both sides are willing to make the sacrifices necessary for peace.