There is a plenty of blame to be shared for why peace talks between the Israelis and Palestinians are going nowhere. But Prime Minister Benjamin Netanyahu’s insistence on expanding Israeli settlements in the West Bank and Jerusalem are a big part of the problem. There may be some glimmer of hope in Mr. Netanyahu’s decision to support an Israeli Supreme Court order to close an illegal neighborhood, known as Ulpana, in the West Bank settlement of Beit El.

Last month, the court ruled the outpost was built on Palestinian land and ordered that its five buildings, housing 142 people, be dismantled. On Monday, Mr. Netanyahu told lawmakers from his Likud Party that the court decision should be obeyed. “Even if the court’s ruling is difficult for some people, we must respect it,” he said.

Some Likud hard-liners have proposed legislation that would override the court’s decision and legalize Ulpana retroactively. That is a terrible idea, not least because it would weaken the court, a vital institution in any democracy. Mr. Netanyahu has rightly urged lawmakers to oppose the measure when it comes up this week and has threatened to fire any government minister who votes for the bill.

Mr. Netanyahu is still committed to his counterproductive settlement policy and, apparently, still eager to mollify his party’s hard-liners. Instead of demolishing the settler buildings, he has proposed moving the structures to another section of Beit El. According to Israeli Channel 2, he may go even further and build 10 new buildings for every one evacuated.

In a speech last month, Mr. Netanyahu suggested that he still sees value in a deal. “A peace agreement with the Palestinians is necessary, first and foremost, to prevent a bi-national state,” he said, according to an English translation. Demographics are pushing Israel in that direction. Meanwhile, Palestinians are despairing that settlements and outposts are expanding so fast that they could soon preclude any chance of a two-state solution.

Mr. Netanyahu should promptly implement the court decision on Ulpana. For the sake of peace, he should go a lot further and declare a cessation in all settlement activity and invite the Palestinians for serious talks. Mr. Netanyahu’s recent decision to bring the center Kadima Party into his coalition has given him space to act. He needs to use his clout to advance a peace agreement that is in the clear interest of Israelis and Palestinians.