Israeli ministers are expected vote next week on the so-called "Greater Jerusalem bill" which would annex 19 illegal Israeli settlements in the occupied West Bank to Israel's municipal boundaries for Jerusalem, according to Israeli newspaper Haaretz.
Israeli Prime Minister Benjamin Netanyahu threw his support behind the bill earlier this month, which would reportedly allow the settlers to retain their autonomy but afford them voting rights in the city's mayoral race.
It would meanwhile create "independent municipalities" for some 100,000 Palestinian citizens or residents of Israel who live within Israel's Jerusalem municipality borders but are located on the other side of Israel's illegal Separation Wall.
Haaretz reported that the bill is expected to win the support of the Ministerial Committee for Legislation, and be sent to the Knesset, for approval.
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According to the bill, the settlements of Ma'ale Adumim – which itself is home to between 125,000 and 150,000 Israeli settlers – Gush Etzion, Efrat, Beitar Illit and Givat Zeev will be included under Jerusalem's municipal jurisdiction, but not officially annexed to Israel, Haaretz said.
The legislation was authored by parliament minister Yoav Kish and Transportation Minister Yisrael Katz, who in the past, according to Haaretz, said that the move would add thousands of Israeli residents to Jerusalem and would "weaken the Arab hold on the capital".
"The Greater Jerusalem bill is an extremely important bill," Haaretz quoted Kish as saying, adding that it "enshrines Jerusalem's status as the eternal capital of the people of Israel and the Jewish majority in the capital."
The proposed Greater Jerusalem bill also comes as the Israeli government has advanced a plan to forcibly expel the Palestinian Bedouin community of Khan Al-Ahmar, under threat of relocation for being located in the contentious "E1 corridor" set up by the Israeli government to link annexed East Jerusalem with Ma'ale Adumim.
Israeli occupation forces approved more than 3,700 housing units in the past weeks in the hope of building 12,000 by the end of the year.
Read more: Ex-Israel Commander: Settlement project has failed
The international community considers all settlements in the occupied Palestinian territories illegal.
Israeli rights group B'Tselem reported that in 2016 Palestinians experienced the highest number of Israeli demolitions since the group began maintaining records.
At the same time, Peace Now reported that Israel's illegal settlement construction in the West Bank increased by 34 per cent in 2016, with Israeli authorities initiating construction on 1,814 new settler housing units.