Israel granted legal status on Sunday to a previously unauthorised outpost in the occupied West Bank.
Israeli Prime Minister Benjamin Netanyahu said the decision to retroactively authorize the 50-family outpost of Havat Gilad was meant to "allow the continuation of normal life there."
Most countries deem Israeli settlements in the West Bank, land Israel captured in a 1967 war that the Palestinians want for a future state, to be illegal. Israel disputes this.
The decision was approved unanimously by Israel's cabinet.
Palestinian officials condemned the move.
"Netanyahu is trying to make facts on ground. All settlements in the West Bank, including in Jerusalem, are illegal," said Wasel Abu Youssef, a member of the Palestine Liberation Organisation's executive committee.
On January 9, a settler resident of Havat Gilad, Raziel Shevah was shot dead from a passing vehicle as he drove near his home.
A Palestinian teenager was killed last night during an Israeli military raid in Burqin for suspects involved in the shooting. Israeli forces in the adjacent city of Jenin last month shot and killed a Palestinian gunman whom they suspected of involvement in the settler's shooting.