ISRAELI PRIME Minister Benjamin Netanyahu had a notoriously difficult relationship with President Obama, so you might expect him to celebrate Donald Trump’s election. As it turns out, things are not so simple. To be sure, Mr. Trump is expected to scrap the Obama administration’s policy of pressuring Israel to curb Jewish settlement construction in the occupied West Bank. But that prospect has emboldened the radical right wing of Mr. Netanyahu’s coalition, which is moving quickly to adopt measures that would legalize existing settlements, create new ones and foreclose the possibility of Palestinian statehood.

The Israeli Knesset on Wednesday gave preliminary approval to a law that would retroactively legalize West Bank outposts that were built on land owned by Palestinians. The bill is aimed at preventing the forced evacuation of a small settlement that the Israeli Supreme Court ordered carried out by Dec. 25, but it would also legalize some 2,000 other illegally constructed homes.

Emboldened rightists are pushing the measure in spite of Mr. Netanyahu’s initial objections and those of the attorney general, who says it violates both Israeli and international law. They are meanwhile planning to relaunch major settlement construction plans that Mr. Netanyahu has kept on ice for years in order to avoid conflict with the Obama administration. Several of these would fill tracts of land around Jerusalem to seal off the city from Arab areas of the West Bank.

“The era of a Palestinian state is over,” Naftali Bennett, a member of Mr. Netanyahu’s cabinet and leader of the pro-settlement Jewish Home party, told reporters after Mr. Trump’s victory. “The combination of changes in the United States, in Europe and in the region provide Israel with a unique opportunity to reset and rethink everything.”

In reality, the “reset” Mr. Bennett and his allies have in mind would do enormous damage to the interests of Israel and the United States. Mr. Netanyahu has supported Palestinian statehood since 2009, albeit without much enthusiasm, because Israel cannot remain both a democracy and a Jewish state while ruling the Palestinians of the West Bank and Gaza. If Israel takes steps to foreclose that option, such as legalizing settlements far outside the barrier it has constructed near its border with the West Bank, it will trigger a huge international backlash — not just from European governments, but also from Arab Sunni states with which it has recently built a quiet alliance.

The Obama administration will be pressed to allow a U.N. Security Council resolution condemning Israeli settlements. And Mr. Trump, who recently spoke of brokering an Israeli-Palestinian settlement, instead would find his administration dragged into yet another Mideast conflict.

No wonder that Mr. Netanyahu’s defense minister is counseling caution. Avigdor Lieberman is not known internationally for his moderation, but on Wednesday he advised his colleagues to “stop the jubilation and public enthusiasm,” adding that the government has received messages from Mr. Trump’s team “ask[ing] us to act modestly.” Mr. Lieberman proposed that the government seek a deal on settlements with the Trump administration after it takes office, and in the meantime not legalize existing outposts or take other provocative steps. Those in Israel who really want better relations with the United States will follow that course.