The thorny issue of Jewish settlements topped the agenda at Israel's weekly Cabinet meeting. The right-wing government is hardening its position.
Israeli Prime Minister Benjamin Netanyahu has ruled out dismantling West Bank settlements, seen as an essential part of any final peace deal with the Palestinians.
Mr. Netanyahu told his Cabinet that the Israeli pullout from the Gaza Strip in 2005 did not bring peace or security. Israel dismantled 21 settlements back then and removed 8,000 settlers from their homes. But a year later the Islamic militant group Hamas seized control of Gaza and stepped up rocket attacks across the border.
Mr. Netanyahu said Gaza is a Hamas terror base controlled by Iran.
"We will not repeat this mistake," he said. "We will not create new evacuees."
Palestinian spokeswoman Diana Buttu says Netanyahu's position is a blow to the U.S.-sponsored peace process.
"What Washington has been looking for and what the Palestinians have been looking for is that Israel is going to actually freeze and in fact dismantle its settlements," Buttu said. "And what Netanyahu said was that he is not going to do any of that."
Mr. Netanyahu's comments came as the Palestinian Fatah movement held its first congress in 20 years. Palestinian President Mahmoud Abbas, who rules in the West Bank, was re-elected as party leader on Saturday. He said Fatah supports the peace process, but he warned that if diplomacy fails, the Palestinians could return to armed resistance.