Israel is coordinating with the US on the topic of sovereignty over settlements in the West Bank, Prime Minister Benjamin Netanyahu said at a Likud faction meeting Monday.

Netanyahu’s comments came the day after the coalition took a bill off the ministers’ agenda that would apply Israeli law to West Bank settlements, a move akin to annexing them.

“On the subject of applying sovereignty, I can say that I have been talking to the Americans about it for some time,” Netanyahu stated.

The prime minister said that he follows to principles on the matter: “One, coordinating with the Americans, because the connection with them is a strategic asset for the State of Israel and settlements. Two, it must be a government initiative and not a private one, because it is a historic move.”

On Sunday, Netanyahu asked coalition party leaders to push off the vote on the “sovereignty bill” in light of the developing security situation, and they unanimously agreed.

The proposal by the chairmen of the influential, right-wing Knesset Land of Israel Caucus, Yoav Kisch (Likud) and Bezalel Smotrich (Bayit Yehudi) was based on a Likud central committee decision calling to apply Israeli law to settlements, and both groups have been calling for the policy to be enacted.

A spokesman for Kulanu said the party supports the move, and that Finance Minister Moshe Kahlon has said so in the past.

Bayit Yehudi said they are “happy that, for the first time, Prime Minister Netanyahu is talking about enacting our sovereignty plan for Area C in Judea and Samaria. The test will be in actions.”

Smotrich called Netanyahu’s bluff, tweeting: “Excellent. I suggest we pass [the ‘sovereignty bill’] in a preliminary reading next week, and then wait to coordinate with the government proposal. That will be a great catalyst for both coordination with the Americans and the government bill.”

Jerusalem Affairs Minister Ze’ev Elkin said that when former prime minister Menachem Begin annexed the Golan Heights, “President Reagan, who was considered pro-Israel, didn’t like it, but we got past it, and no one remembers today what punitive steps the Americans took towards Israel.”

Zionist Union leader Avi Gabbay said “it’s a sad day for Israel when the White House puts out an official statement that our prime minister isn’t telling the truth. It’s not just corruption; Netanyahu is wearing down our relationship with our greatest ally,” he stated.

Zionist Union MK Tzipi Livni said “Netanyahu is letting the Bayit Yehudi lead to annexation, and the meaning is a country without a Jewish majority, without democracy and the continuing, bloody conflict.”

Joint List chairman Ayman Odeh said “the Israeli government opposes peace and supports apartheid.

“This is a wake-up call for the international community and the citizens of the state who strive for peace. We are in the last moments in which the vision of two states is still possible. We must stop Netanyahu’s settler government,” Odeh stated.

Meretz MK Tamar Zandberg said that Netanyahu was trying to distract from corruption investigations against him.

“In order to clear the smoke of the cigars in his indictment, Netanyahu is trying to light the whole region on fire. His declaration is the extreme right-wing government declaring a binational state under an apartheid regime, without any chance of separation or negotiations, and against the will of the Israeli and Palestinian public,” she stated.

MK Hilik Bar (Zionist Union) said that annexation is "not a political solution, and is probably the most destructive idea" that has been raised in the Knesset. Annexing the West Bank would "threaten the State of Israel as a Jewish and democratic state," he added.

A spokesman for the White House peace team clarified that the US has not discussed with Israel any plans to annex the territory.

"Reports that the United States discussed with Israel an annexation plan for the West Bank are false," said Josh Raffel. "The United States and Israel have never discussed such a proposal, and the President’s focus remains squarely on his Israeli-Palestinian peace initiative."

Michael Wilner contributed to this report.