Six teams from West Bank currently play in IFA tournaments, all in the lower non-professional leagues.
Fifa is expected to recommend Israel be given a six-month warning over their participation before considering a vote on sanctions.
The Israeli Foreign Ministry is lobbying friendly governments to use their influence within Fifa to try to indefinitely postpone a vote on the committee's report.
Technically, all the settlement teams' games could be moved to within the Green Line. Such a solution would probably solve the issue as far as Fifa is concerned, but it would contradict current Israeli policy of regarding any boycott of the settlements as a boycott of all Israel.
This policy however does not always hold. On Sunday the cabinet authorised an agreement with the Chinese government allowing Chinese construction companies to work in Israel.
As part of the agreement, Beijing demanded, and accepted, an assurance that Chinese workers would not be building in the settlements.
While this would construe a boycott, government spokesmen in Jerusalem insisted the assurance was for "security reasons".
