The US government agrees, but can't do much about it, or so it seems. But they can arm twist the Palestinians, with Mubarak's help of course. He has been very helpful in that area.
Josh Reubner: ' President Obama--like all presidents since Jimmy Carter--have configured their policies toward Israel's settlements within the parameters of a 1978 State Department legal memo that concluded they are "inconsistent with international law." Presidents have differed in the degree to which they have tolerated or tacitly supported Israel's ongoing settlement construction, yet the State Department's basic premise that they are illegal is still official U.S. policy.
...As recently revealed in the Palestine Papers, Special Envoy for Middle East Peace George Mitchell and his team of negotiators thereafter began a crude and ignominious effort to arm-twist Palestinian negotiators into resuming negotiations on the basis of a transparently flawed partial Israeli settlement "moratorium." '