Some 20 homes that have been built in the Mitzpeh Cramim outpost during the past year could spark a similar coalition crisis to the one recently created by the Ulpana neighborhood in the settlement of Beit El, according to sources in the defense establishment.

The prefabricated and permanent homes, in the outpost northeast of Ramallah, were all built on land that the state officially recognizes as being privately owned by Palestinians.

Sources in the defense establishment warn that the situation could spark the next crisis in Prime Minister Benjamin Netanyahu's cabinet, similar to the one that erupted over the Ulpana neighborhood and the outposts of Givat Assaf and Migron, also built on private land. Meanwhile, settlers have moved into the buildings at Mitzpeh Cramim.

Construction in the outpost has continued unhindered, despite the Defense Ministry's Civil Administration's orders to stop the the work. The orders were issued in 2011.

Defense sources told Haaretz that the construction in Mitzpeh Cramim was illegal but admitted that no real steps had been taken to stop it.

The fact that construction in Mitzpeh Cramim is on officially recognized private land makes it difficult to find a compromise or to play legal tricks to enable the settlers to stay there legally, the sources said.

Mitzpeh Cramim is located some 700 meters away from the settlement of Kochav Hashahar. The outpost was set up in 1999 and almost all the buildings in it are on private land belonging to Palestinians from the nearby villages of Dir Jarir and Kafr Malik. It is defined as an illegal outpost in an influential report that was prepared by attorney Talia Sasson for the state in 2005.

The new structures were set up by Amana, the settlement arm of the Gush Emunim movement.

Shortly after the Civil Administration issued the order to stop the building last year, the Dir Jarir local council petitioned the High Court of Justice over the construction.

The defense sources said that, once a High Court hearing is under way, no move can be taken until the court gives its verdict. The sources admitted that, due to the political sensitivity of evacuating outposts, the political leadership is unlikely to deal with the issue as long as a court verdict doesn't force it to make a move.

Dror Etkes, a peace activist monitoring Israel's settlement policy in the territories, said: "The new construction in Mitzpeh Cramim is one of hundreds of examples that collaboration with the settlers has become part of the Israel Defense Forces and Civil Administration's DNA.

"Due to this collaboration these bodies don't learn any lessons from their past failures, and continue to neglect their duty to protect Palestinians' private property," he added. "In so doing they are deepening the rift between the settlements and the rule of law."

Netanyahu seeks to sidestep outposts demolition

Netanyahu asked the State Prosecutor’s Office on Wednesday to examine whether a request can be lodged with the High Court to further delay the evacuation order of the Ulpana neighborhood in the settlement of Beit El, scheduled for May 1. The Ulpana neighborhood is comprised of multi-story buildings housing dozens of families.

According to a senior official who was updated on the meeting that was held on the matter, Netanyahu asked Attorney General Yehuda Weinstein to find a solution.

A minister who took part in the meeting said that all of the ministers who took part agreed that a solution must be found to prevent the demolition.

Moshe Ya'alon, Israel's vice prime minister, said at the meeting that houses should not be built on private Arab land, but that the Ulpana neighborhood is part of an existing settlement built and funded by the Housing Ministry. He added that its residents were not aware that there were legal problems with their homes.

Ya'alon sharply criticized the Defense Ministry and the State Prosecutor’s Office, saying that “their behavior toward the residents is outrageous.” According to Ya'alon, instead of trying to find a solution, the authorities are dragging their feet. “In term of demolition – you willingly take part,” he said. “When it comes to regulating, you drag your feet. Where were you all year? There was enough time to deal with this and regulate the matter for the sake of the settlement.”

Ya’alon’s statements mark a widening rift between government ministers and the State Prosecutor’s Office. Netanyahu, who a year ago ordered the demolition of the neighborhood, changed his mind after coming under pressure from his cabinet, and is now asking the State Prosecutor’s Office “to find a solution.” Weinstein has already told Netanyahu that a solution is not possible, and that the neighborhood is to be demolished.

Osnat Mendel, director of High Court petitions in the State Prosecutor's Office, told the ministers that there are lessons to be learned from the Migron affair, and that they must understand that the Supreme Court will not accept requests for long-term delays. A source familiar with the matter told Haaretz that “there is no legal solution and there will be none.”

The Ulpana neighborhood was founded during Netanyahu’s first term, in memory of Ita and Efraim Tzur who were murdered in a terrorist attack. The neighborhood includes 84 apartments in 14 buildings, and several caravans. In 2008 the Palestinian owners of five buildings petitioned the High Court, and last May the state declared that the buildings will be demolished within a year. Former Supreme Court President Dorit Beinish then announced that proceedings have been exhausted.