Following an emergency meeting on Monday night, an Israeli ministerial committee announced that it would ask the High Court to postpone plans for the evacuation of the West Bank outpost of Ulpana at the end of the month. Opponents claim this could break up the coalition government.
The committee also announced plans to legalise the West Bank outposts of Bruchin, Sansana and Rehalim.
Speaking to Army Radio on Tuesday, Prime Minister Benjamin Netanyahu said his governing coalition was strong and that he was not afraid of elections, reiterating that the issue of Ulpana had to be resolved.
On Sunday, Defence Minister Ehud Barak criticised the right-wing MKs who have attacked him in the wake of his vow to adhere to a High Court ruling that the 30 homes at Ulpana must be evacuated.
Mr Barak said: "We are subject to the rule of law and must ensure that Israel remains a normative country among the advanced nations of the world."
The controversy surrounds 30 homes that the High Court has ruled were built on private Palestinian land. Residents say the land was legally purchased from its Palestinian land-owners.
On Saturday, the same day that Transportation Minister Yisrael Katz visited families at Ulpana, Vice-Premier Moshe Ya'alon said an evacuation of Ulpana would threaten the coalition, and accused Mr Barak of working against the interests of the government.
In response, Mr Barak accused Mr Ya'alon and Mr Katz of "Feiglinism" - a reference to the far-right branch of the Likud party led by Moshe Feiglin. The war of words heated up again the next day when Jewish Home Party chair Daniel Hershkowitz warned that his party and its three MKs would leave the coalition if the move is carried out.