Israel is planning to build the first new settlement in the West Bank in a decade.
The Maskiot settlement is located in the Jordan Valley rift.
But the plan is infuriating Palestinians who believe the settlement will ruin peace efforts.
Israel's Defense Minister Ehud Barak will approve the move in the coming weeks.
The United States has said new settlements could hinder peace talks. But Israeli officials say the settlement has been in the works for years.
Nine Israeli families have already moved into mobile homes on the site.