A U.S. demand to curb settlement activity topped the agenda at Israel's weekly Cabinet meeting.  The government is divided over the issue, as we hear from

Israeli PM Benjamin Netanyahu, attends the weekly cabinet meeting in Jerusalem, 24 May 2009

Prime Minister Benjamin Netanyahu told his Cabinet that Israel will not build new West Bank settlements, but it will continue construction in existing communities to accommodate "natural growth."  The announcement follows a White House summit last week, during which U.S. President Barack Obama urged Mr. Netanyahu to halt settlement activity.

In response, Defense Minister Ehud Barak said he intends to dismantle 22 illegal settlement outposts in the West Bank. and if the settlers resist, he said, they will be removed by force.

Cabinet Minister Yitzhak Herzog is from Barak's dovish Labor Party.

Herzog told reporters the outposts, which often consist of just a few trailers and makeshift structures, are a blight on Israel's image.  He said they must be removed to show the international community that Israel is serious about advancing the peace process.

The internationally-backed "Roadmap" peace plan demands that Israel remove the outposts as a first step toward a settlement freeze.  But key members of Mr. Netanyahu's right-wing government want something in return.

Nationalist Foreign Minister Avigdor Lieberman said the outposts should not be dismantled until the Palestinians keep their commitments under the Roadmap and crack down on terrorist groups.

Cabinet Minister Eli Yishai of the ultra-Orthodox Shas party said the peace process is a two-way street.

He said Israel cannot halt building in the settlements while illegal Palestinian construction, which he described as "rampant," is ignored.

Palestinian officials say they will not resume peace talks with Israel until Mr. Netanyahu agrees to freeze construction in the settlements.