The bilateral agreements reached between Israel and the Palestinians, and which govern their relations, contain no prohibition on the building or expansion of settlements. On the contrary, it is specifically provided that the issue of settlements is reserved for permanent status negotiations, reflecting the understanding of both sides that this issue can only be resolved alongside other permanent status issues, such as borders and security. Indeed, the parties expressly agreed - in the Israeli-Palestinian Interim Agreement of 1995 - that the Palestinian Authority has no jurisdiction or control over settlements or Israelis and that the settlements are subject to exclusive Israeli jurisdiction pending the conclusion of a permanent status agreement.
It has been charged that the prohibition, contained in the Interim Agreement (Article 31(7), against unilateral steps which alter the "status" of the West Bank and Gaza Strip implies a ban on settlement activity. This position is unfounded. This prohibition was agreed upon in order to prevent either side from taking steps which purport to change the legal status of this territory (such as by annexation or unilateral declaration of statehood), pending the outcome of permanent status negotiations. Were this prohibition to be applied to building - and given that the provision is drafted to apply equally to both sides - it would lead to the dubious interpretation that neither side is permitted to build homes to accommodate for the needs of their respective communities until permanent status negotiations are successfully concluded.
In this regard, Israel's decision to dismantle all settlements from the Gaza Strip and some in the Northern West Bank in the context of the 2005 Disengagement Plan were unilateral Israeli measures rather than the fulfilment of a legal obligation.