"Today, the government will provide for the status of Havat Gilad in order to facilitate orderly life there", Netanyahu said.
Full recognition of the outpost, however, which unlike established Israeli settlements is considered illegal under Israeli law, still faces a number of legal and bureaucratic obstacles.
"Anyone who thinks that through the abominable murder of a resident of Havat Gilad, a father of six, they would break our spirits... is making a bitter mistake", he said.
Jenin residents reported heavy military presence and said IDF soldiers, using loudspeakers, called for the surrender of Ahmad Nassar Jarrar, the suspected leader of the terror cell that shot and killed 35-year-old Rabbi Shevach, as he drove home to the Chavat Gilad outpost.
Israel agreed Sunday to recognize a previously unauthorized West Bank outpost as an official settlement following the killing of one of its residents last month.
He spoke before the anticipated rare approval of a new West Bank settlement, already known as Havat Gilad.
"Israel would have to evacuate the outpost in any foreseeable two-state solution scenario, which, together with the other settlements and outposts it will have to evacuate, would require tremendous political will on Israel's part". "To those who sanctify death, we will sanctify life", said Israel's Prime Minister Benjamin Netanyahu.
Israel captured the West Bank, along with the Gaza Strip and east Jerusalem in the 1967 Mideast war, areas the Palestinians want for a future state.
The vote came as European nations voiced growing concern over settlement expansion in the occupied Palestinian territory, but with US President Donald Trump largely refraining from such criticism, which many Israelis see as a green light.
A statement from Cogat, the Israeli defense body responsible for Palestinian civilian affairs, said the demolition was approved after it had been challenged in Israel's Supreme Court.
Havat Gilad (Hebrew: Gilad Farm) is an Israeli community in Samaria which is outside the jurisdiction of Shomron Regional Council.
"״The government is fulfilling its obligation to legalize the community as we promised to the family of Rabbi Raziel after the attack", deputy foreign minister Tzipi Hotovely said in a tweet of her own.