The International Court of Justice and many other countries regard all Jewish settlement in the occupied territories as illegal, citing provisions in the Geneva Conventions which forbid the forced transfer of populations into lands seized in war.
Israel argues that the term "forced" refers to the settlers, not the indigenous people, and that its activities are legal because its settlers move to the West Bank of their own free will.
Peace Now said the number of Jewish settlers living in the West Bank, excluding East Jerusalem, had almost trebled to 270,000 since Israel signed the Oslo peace accords in 1993. Another 180,000 Israelis live in parts of the West Bank annexed by Israel as part of its self-declared East Jerusalem territory.
Mr Bush's attempt to revive the moribund Israeli-Palestinian peace protest at Annapolis two months ago is already faltering in the face of Palestinian protests at Israel's subsequent decision to build hundreds of new homes for Jews in East Jerusalem.