Israel has given settlers a green light to take over a once-disputed building in a West Bank city after an IDF soldier was fatally wounded there by a sniper. There are calls to review a deal to release Palestinian prisoners essential for peace talks.

PM Benjamin Netanyahu gave an order to permit settlers to move into a building in the city of Hebron near the scene of the suspected Palestinian attack, saying "whoever tries to uproot us from the city of our fathers will achieve the opposite." The building was vacated by Israel in April 2012 after a dispute over its ownership.

The move was in response to the Sunday shooting of IDF Staff Sergeant Gal Kobi, 20, who received a gunshot while standing at a checkpoint near the Tomb of the Patriarchs, a place of reverence for both Jewish and Muslims. He died in hospital hours later.

Following reports of the murder Israeli Economy Minister Naftali Bennett demanded that the cabinet reviewed its commitment to release dozens of Palestinians as part of the ongoing peace negotiations with the Palestinian Authority.

“There is no doubt that the developments that have occurred since the talks resumed require the government to recalculate its path,” he argued. “The response to terrorism must be a war on killers, not a dialogue with those who encourage killers.”

Deputy Defense Minister Danny Danon suggested freezing the talks until PA President Mahmoud Abbas condemns the killing.

Earlier on Saturday Israeli authorities confirmed that a soldier had been abducted and killed on Friday by a Palestinian in the West Bank. The suspected killer was arrested.

About two dozen Palestinians have died in various confrontations with Israeli troops since the start of the year, with the latest such incident reported a week ago.

Israel controls parts of the West Bank since capturing it in the 1967 Middle East war along with other territories. The Netanyahu government has been rapidly developing Israeli settlements in the occupied lands, a policy widely deemed to violate international law outside of Israel. The settlements are a constant point of conflict in the Israeli-Palestinian confrontation.

Some 500 Israeli settler families live in Hebron among some 100,000 Palestinians. The city remains a hotbed of tensions.

Israel and the Palestinian Authority have reengaged in peace talks this summer amid lingering doubts that any solution may come out, since the negotiations are hampered by decades-old grudges and no apparent willingness from either party to compromise.