The West Bank and East Jerusalem were captured by Israel during the Six Day War in 1967, and the first settlements were established shortly afterwards.
Today nearly 700,000 Israelis live in both areas, amounting to nearly a tenth of Israel’s entire Jewish population.
Most of the international community, including Britain, considers the territory to be occupied by Israel and opposes settlement construction.
Benjamin Netanyahu responded to the US announcement by saying it had corrected a “historical wrong” and had recognised the “reality on the ground”.
Benny Gantz also tweeted his support for the move.
“I applaud the US government for its important statement, once again demonstrating its firm stance with Israel and its commitment to the security and future of the entire Middle East,” he said.
The announcement on Monday is viewed as a continuation of President Donald Trump’s controversial pro-Israeli policy moves.
In 2016 the UN Security Council passed a resolution stating West Bank settlements were a “flagrant violation” of international law. This had been the American position at the time.
Palestinian politician Saeb Erekat reacted by saying: “Once again, with this announcement, the Trump administration is demonstrating the extent to which it’s threatening the international system with its unceasing attempts to replace international law with the ‘law of the jungle’.”
Meanwhile Oded Revivi, foreign envoy for the Yesha Council’s — Israel’s biggest settler organisation — said:”I congratulate President Trump and his government on the truly courageous recognition, settlements are not a crime and not a barrier to peace.
“Now is the time to take action utilising our political and legal platforms to apply Israeli law.”