Given the dispute over the territories where the settlements were built, the issue of dismantling them has been considered. Arab parties to the conflict have demanded the dismantlement of the settlements as a condition for peace with Israel. As part of the Egypt–Israel Peace Treaty, Israel was required to evacuate its settlers from the 18 Sinai settlements. The evacuation, which took place in 1982, was done forcefully in some instances, such as the evacuation of Yamit. The settlements were demolished, as it was feared that settlers might try to return to their homes after the evacuation.
During the peace process with the Palestinians, the issue of dismantling the West Bank and Gaza Strip settlements has been raised.
As part of Israel's unilateral disengagement plan, Israel evacuated the Gaza Strip and part of the West Bank, including all 21 settlements in Gaza and four in the West Bank, while retaining control over Gaza's borders, coastline, and airspace. Most of these settlements have existed since the early 1980s, some are over 30 years old, and with a total population of more than 10,000, many of whom have yet to find permanent housing. There was significant opposition to the plan among parts of the Israeli public, and especially those living in the territories. George W. Bush said that a permanent peace deal would have to reflect "demographic realities" in the West Bank regarding Israel's settlements.
Within the former settlements, almost all buildings were demolished by Israel, with the exception of certain government and religious structures, which were completely emptied.
Under an international arrangement, productive greenhouses were left to assist the Palestinian economy but these were destroyed within hours by Palestinian looters. Following the withdrawal, many of the former synagogues were torched and destroyed by Palestinians. The Palestinian leadership "maintained" that the synagogues were "symbols of Israeli occupation." Kofi Annan, the Secretary-General of the United Nations at the time, said the Palestinian Authority had a "moral responsibility to protect the synagogues as places with religious significance.
Some Israelis believe the settlements need not necessarily be dismantled and evacuated, even if Israel withdraws from the territory where they stand, as they can remain under Palestinian rule. These ideas have been expressed both by people from the left, who see this as a possible situation in a two-state solution, and by extreme right-wingers and settlers that, while objecting to any withdrawal, claim stronger links to the land than to the state of Israel.
A July 2009 survey of Israeli public opinion found that people are about evenly divided on the issue, with 46 percent of those polled in support of further construction and 44 percent opposed. Since 1982, the Sinai Peninsula has not been regarded as occupied territory.
In 2009, Benjamin Netanyahu said: "I have no intention of building new settlements in the West Bank... But like all the governments there have been until now, I will have to meet the needs of natural growth in the population. I will not be able to choke the settlements. On 15 October 2009, he said the settlement row with the United States had been resolved.
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