The Knesset decisively defeated a bill on Wednesday, aiming to legalize certain settlement outposts built on privately owned Palestinian land, but Prime Minister Benjamin Netanyahu promised a series of alternative moves aimed at strengthening West Bank settlements, including the construction of 851 new homes there.

The bill was defeated in preliminary reading by a vote of 69 to 22.

Speaking at a press conference after the vote, Netanyahu lashed out at left-wing organizations that have petitioned the High Court of Justice to get such outposts dismantled. "Those who think they are using the legal system to weaken the settlements are mistaken, since the opposite is actually taking place," he said.

Specifically, he promised, the Beit El settlement will be expanded by 300 new homes. That pledge is meant to compensate for the planned demolition of Beit El's Ulpana neighborhood, which was the immediate impetus for the bill's submission. The bill's defeat paves the way for the outpost to be demolished by July 1, in line with the High Court's order.

Moreover, Ulpana itself will not actually be demolished: Instead, the five apartment buildings in question, which are home to 30 families, will be moved, intact, to a nearby tract of land confiscated by the army in the 1970s.

Third, Netanyahu and Housing Minister Ariel Atias announced that they will immediately issue a tender for the sale of land to build an additional 551 housing units in other West Bank settlements. About 60 percent of these will be in the settlement blocs that Israel wants to keep under any future deal with the Palestinians, including 117 in Ariel, 92 in Ma'aleh Adumim and 114 in Efrat. But the remaining 40 percent will be built outside the blocs, including 84 in Kiryat Arba, near Hebron, and 144 in Adam.

Fourth, Netanyahu acceded to a long-standing settler demand by promising to divest Defense Minister Ehud Barak of sole authority to approve or veto new construction in the settlements and transfer this authority to a ministerial committee. The theory behind this demand, which several Likud ministers had also pushed, is that Barak is one of the ministers least friendly to the settlements, so diluting his influence would improve the chances of getting new construction approved.

However, the new committee will be chaired by Netanyahu - who in the past has coordinated his positions closely with Barak, and will presumably continue to do so. Indeed, Barak's staff offered no criticism whatsoever of this decision, and Defense Ministry officials said that in practice, it will change little, since several other ministers have in any case been involved in decisions on settlements in recent months.

Finally, according to officials in the Prime Minister's Bureau, Netanyahu extracted a legal opinion from Attorney General Yehuda Weinstein outlining a mechanism to provide settlers with protection against future suits by Palestinians who own land on which settlements or outposts were built. "Weinstein's opinion met the prime minister's demands," said one, though he declined to elaborate on how this mechanism would work.

Netanyahu and Weinstein, along with other senior members of the state prosecution, held a lengthy meeting on this issue Tuesday night. At that meeting, which ended up running into the wee hours of Wednesday morning, Netanyahu also sought Weinstein's approval for the relocation of Ulpana and the planned new construction in Beit El, which will also be on land originally seized by the army. In a brief statement issued after it ended, the prime minister said, "The solution we found will both bolster settlement and uphold the rule of law."

Weinstein, however, refused to offer any elaboration of his own position, despite repeated requests by journalists. Instead, the Justice Ministry issued a brief statement saying merely that he held extensive deliberations on various proposals for solving the problem. It then reiterated three statements he has made several times previously: that he opposed the bill defeated Wednesday; that he doesn't think the High Court's ruling on Ulpana sets a precedent for other, similar cases; and that the state should work harder to prevent building on private Palestinian land before it happens.

But the issue of building civilian housing on land seized for military purposes is problematic from a legal perspective, and several of the academic experts on international law whom Weinstein consulted this week said they believe it would violate international law and create serious international complications for Israel.

The U.S. State Department responded to the announcement of the new construction by saying it believes settlement construction undermines efforts to restart Israeli-Palestinian peace talks.

State Department spokesman Mark Toner said the U.S. did "not accept the legitimacy of continued Israeli settlement activity. And, we want to see both parties refrain from these kinds of actions and to get back into negotiations."

At his press conference Wednesday, Netanyahu said, "Relocating homes isn't a step the government is happy to take. But the court decided as it did, and we respect the court's decisions."

"Israel is a democratic country, and obedience to the law is an important element of our ability to live in freedom," he added. "As prime minister, I'm committed to upholding the law, and I'm also committed to upholding settlements. There's no contradiction between the two."

The Knesset vote was held a day after Netanyahu announced that the government opposed the bill, and that any minister or deputy minister who supported it would be fired. Several ministers and deputy ministers had initially considered voting for the bill anyway, and some openly pledged to do so. But in the end, all of them either voted against or skipped the vote, saying that the new moves announced by Netanyahu were sufficient to justify the bill's defeat.

Nevertheless, settlement activists vowed at their own press conference Wednesday to continue the battle to keep Ulpana from being demolished, both by submitting additional legislation and by protest activities. As if to prove their seriousness, a truckload of tires was delivered to Ulpana later Wednesday to be used as barricades.

"The Netanyahu government has been revealed Thursday in all its shame and poverty," said one activist, Ulpana resident Yehuda Yifrach. "It should have provided a real solution."

During the Knesset debate, hundreds of supporters of the bill demonstrated nearby, blocking off roads in the area. Clashes broke out between the police and the protesters, and at least four of them were arrested.

Dozens of activists then proceeded to block roads at the entrance to Jerusalem, and the city's light rail service was temporarily disrupted.