The major problem is that no one actually recognizes that these settlements are not illegal. Israel annexed the West Bank and Gaza Strip as part of the settlement of the War of 1967, which was caused by aggressive Arab action against Israel, and Isreal has the right to do whatever it wants with this legally acquired land. Just because the Palestinians want the land they lost in the 1967 war back and Israel is settling some of its citizens in this land, does not constitute thievery. The jury is still out in Israel about whether or not Israel will be generous enough to cede this land, and what the terms of this exchange will be. The Palestinians are just going to have accept this.
Netanyahu condemns West Bank arson attack, calling it 'terror' (Haaretz)
from the article: UN: Israeli-Palestinian conflict in 'profound and persistent deadlock'