Israel's parliament has passed a controversial law retroactively legalising about 4,000 homes built on settlements in the occupied West Bank, BBC reports.
The law passed by 60 votes to 52.
It states that the original Palestinian landowners will be compensated with money or alternative land.
The new US President Donald Trump has taken a softer stance on Israel's settlements than his predecessor, Barack Obama, despite widespread international opposition.
Emboldened by the new US administration, Israel has undertaken a series of pro-settlement moves in recent weeks, including the approval of thousands of homes.