You are completely wrong. For a piece of land to be occupied, it had to belong to group A and then be taken over by group B. The West Bank never belonged to the Pallies, so they cannot be group A in this scenario. The settlements are legal because of resolutions passed in the League of Nations; when the U.N. was formed, one of their principles was to accept League of Nations resolutions as valid and binding, so the sttlements are legal under U.N. law. Also, Israel did not declare borders in 1948, so your statement is false. Also, Israel is not desperate for a "negotiated" peace. Where did you make that one up from?
UN: Gaza could be 'uninhabitable' by 2020 if trends continue (AP)
from the article: Israel approves new building plan for West Bank settlement