Israel's centre-right Blue and White party is preparing to annex the Jordan Valley and northern Dead Sea in the occupied West Bank, Kan Reshet B radio reported on Thursday.

Blue and White, led by former army chief Benny Gantz, is currently negotiating with various parties as it attempts to form a governing coalition following Israel's September elections.

The party came neck and neck with Prime Minister Benjamin Netanyahu's Likud in the polls, but as with April's election, neither side appears capable of forming a government.

After 10 years straight of Netanyahu's increasingly right-wing rule, which has seen an emboldening of the settler movement in the occupied West Bank and East Jerusalem, the prime minister's critics have hoped Gantz would prove a more moderate leader, were he to gain power.

However, it has emerged that Gantz's party is happy to impose Israeli sovereignty over large areas of the West Bank, in a highly controversial move first promised by Netanyahu.

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Two Blue and White members, Yahiel Moshe Trooper and Yoaz Hendel, met with Rafi Peretz, the pro-settlement leader of the far-right Jewish Home party, on Wednesday as part of coalition-building talks.

Trooper and Hendel reportedly told Peretz they are willing to advance an “ideological move” to impose sovereignty over the Jordan Valley and north Dead Sea, if and when Gantz heads the next Israeli government.

Annexation of the West Bank became a pressing issue in Israel ahead of the September elections, with Netanyahu vowing to annex the Jordan Valley "immediately" if re-elected.

Last week, Ayelet Shaked, former justice minister and head of the religious-nationalist New Right party, attempted to speed up annexation with a new bill that would see Israeli sovereignty applied over the Jordan Valley and several illegal settlements.

If passed, the ambitious draft law will extend Israeli law over strategic settlements in the southern West Bank, such as Gush Etzion near the Palestinian city of Hebron, and Efrat and Beitar Illit, both of which lie close to the holy town of Bethlehem.

The Jordan Valley accounts for around one-third of the West Bank, and Israeli right-wing politicians have long viewed the strategic area as territory Israel should never retreat from.

Since Israel captured and occupied the West Bank in the 1967 Middle East war, Israeli military law has been applied in its settlements and areas of direct control.

However, extending sovereignty would see commercial, industrial and archaeological areas and roads come under regular Israeli law and jurisdiction. Settling areas occupied in conflict is illegal under international law.

To date, more than 600,000 Israelis are living in an often confrontational coexistence with three million Palestinians in the West Bank and East Jerusalem.