By Maayan Lubell
JERUSALEM (Reuters) - Israel's right wing has been eagerly awaiting Donald Trump's arrival in the White House, hoping a Republican president will usher in a new era of support for Israeli settlement-building on land Palestinians want for a state.
The far-right Jewish Home party, along with members of Prime Minister Benjamin Netanyahu's Likud party, is promoting legislation that would effectively annex one large settlement in the occupied West Bank to Israel and another bill that would legalize dozens of unauthorized outposts.
But there could be a question mark over the issue, with Netanyahu possibly looking to curb settlement laws, wary of the dangers of the far right's ambitions being too freely unleashed as he feels his way forward with the new U.S. administration.
The Israeli leader's spokesman declined to comment on Netanyahu's position.
In its final weeks, the Obama administration angered the Israeli government by withholding a traditional U.S. veto of an anti-settlement resolution at the United Nations Security Council, enabling the measure to pass.
President Barack Obama on Wednesday said he was worried that the prospects for a two-state solution to the Israeli-Palestinian conflict -- the idea of Israel and Palestine living side-by-side in peace and security -- were waning.
Israeli right wingers contrast Obama's warnings with what they see as positive signals from Trump that indicate Washington's attitude towards settlements in the West Bank and East Jerusalem, areas Israel captured in a 1967 war, is about to change.
Trump's nominee to be U.S. ambassador to the United Nations, Nikki Haley, echoed his condemnation of the world body over its treatment of Israel at her Senate confirmation hearing on Wednesday.
"SUDDEN MOVES CAN BE EXPLOSIVE"
Trump, who has said he wants to meet Netanyahu "at the first opportunity", has pledged to move the U.S. embassy from Tel Aviv to Jerusalem. In his remarks on Wednesday, Obama cautioned against "sudden unilateral moves" that could be "explosive".
Israel regards all of Jerusalem as its capital but most of the world does not, seeing its final status as a matter for peace negotiations that have been frozen since 2014.
In a move that has emboldened Israeli right wingers, the president-elect has already appointed a new U.S. ambassador to Israel, David Friedman, who is considered far right on issues, including settlement building.
Naftali Bennett, leader of the Jewish Home, hopes that under Trump's administration the notion of establishing a Palestinian state will be abandoned.
He wants to promote a bill extending Israeli sovereignty to Maale Adumim, a West Bank settlement of about 40,000 Israelis that lies just to the east of Jerusalem.
That would in effect mean Israel annexing some of the land it has occupied for almost 50 years.
"It's either (Israeli) sovereignty or Palestine," Bennett told Army Radio this month. "The question is not what will Trump do but what will Israel ask for. What will Israel present as its vision. We are in the money-time now for forming this vision."
But Professor Itamar Rabinovich, a former Israeli ambassador to the United States, believes the right wing may be getting ahead of itself and its ambitions could backfire.
"In reality, where the United States needs to live not just with us but also with the Arab and Muslim world, supporting extremist measures in Israel could turn out to be something the United States cannot live with," Rabinovich said.
ANNEXATION "RED LINE"
Bennett ultimately advocates the annexation of most of the West Bank, leaving just the major Palestinian towns and cities in Palestinian hands. But first he is testing the water with the annexation bill, entitled "Sovereignty in Maale Adumim First". It is due for a first discussion in a ministerial committee on Sunday, two of its drafters said.
"I believe this is the gift that the people of Israel deserve in the run-up to Trump's inauguration," Bennett's fellow party member, Betzalel Smotrich, told parliament on Tuesday.
A spokesman for Palestinian President Mahmoud Abbas said annexation was a red line. "Any such Israeli decision will be considered a dangerous escalation that would end any possible hope for peace," Nabil Abu Rdainah told Reuters.
Late last year, a separate bill that would retroactively legalize settlement outposts built on privately-owned Palestinian land in the West Bank passed the first of three votes in parliament required to make it law. No dates have been set for final approval, and it has since disappeared from the agenda.
Asked about the delay, a source in Netanyahu's office said: "He wants to freeze the outpost bill."
Asked about the law, a legislative source said: "It's stuck in committee. There will be attempts to bring it back on the agenda after Jan. 20, but I think it is pretty much buried at this point," he said, referring to the date of the inauguration.
The legislation had drawn anger from the Palestinians and international condemnation. Smotrich told Reuters that it will be brought to a second and third reading in February. "We were waiting for the end of the Obama age," he said.
A political source close to Netanyahu said that with regard to the proposed Maale Adumim annexation, the prime minister may say he wishes to hold off until after he meets Trump.
Tzachi Hanegbi, a Likud minister and Netanyahu confidant, said Netanyahu understood that such steps would further isolate Israel. Most countries regard Israeli settlements as illegal, a view that Israel disputes.
"He does not want to shake the entire world and put Israel at the center of contention, isolation and criticism," Hanegbi told Army Radio. "I hope the government will not let itself be dragged after Jewish Home's agenda."
At the same time, Netanyahu is competing with Jewish Home for right-wing, pro-settlement voters. He may disagree with the party's approach, but he can't ignore it.
"If the (annexation) bill comes up, Likud ministers will support it. They can do nothing else," the source said.
(Writing by Maayan Lubell; Additional reporting by Ali Sawafta in Ramallah; Editing by Jeffrey Heller and Peter Millership)