Sonny, they aren't. ISRAEL can't do something merely because it insists "It's Jewish". ISRAEL is a state, not a people, and so it is constrained by the same int'l laws that bind all states. One of those laws is that you can't colonize an occupied territory.
Egypt says verdict in Al-Jazeera case expected Saturday (AP)
from the article: Obama: Israeli settlements hinder chance of deal with Palestinians