New financial incentives designed to lure Israelis to poorer, outlying areas have been revised to exclude West Bank settlements, officials said Thursday.

A government announcement about the Cabinet decision earlier this week identified some 550 communities that qualified for the subsidies, including 70 West Bank settlements. Many of them are deep inside the West Bank, the heartland of what the Palestinians hope will be an independent state.

In the original announcement, the government said the subsidies are "meant to encourage positive migration to these communities."

But hours after Sunday's vote, the Cabinet held a second vote by telephone to exclude the settlements from the measure, at least in the short run. Although the settlements still appear on the list, the government vote said granting them incentives would be "contingent on a decision by political leaders."

"The government decision on Sunday does not apply to communities in the West Bank," said spokesman Mark Regev. There was no guarantee that approval would not be granted in the future.

The initial Israeli decision drew Palestinian condemnations and demands from the U.S. for an explanation. The visiting U.N. secretary-general, Ban Ki-moon, also criticized Israeli settlements at a meeting with Prime Minister Benjamin Netanyahu on Wednesday.

At a news conference with Ban, Netanyahu denied caving in to international pressure by removing the settlements from the list. He said the initial Cabinet decision was a mistake, and "we corrected it immediately."

Israeli settlements in the West Bank and east Jerusalem are at the heart of the current impasse in Mideast peace efforts. The Palestinians claim both areas, captured by Israel in 1967, for a future state and say the settlements are making that increasingly difficult.

The Palestinians say they will not return to the negotiating table without a halt to settlement construction. Israel calls that an unacceptable precondition.