Israel's Prime Minister Benjamin Netanyahu gives a statement to the media at his Jerusalem office on June 6, 2012. (Ronen Zvulun/REUTERS)

Israeli lawmakers voted overwhelmingly Wednesday against a measure that would have legalized unauthorized Jewish settlements in the West Bank, including one that the Israeli Supreme Court has ordered to be partially demolished before July.

The vote in parliament increased tensions between Prime Minister Benjamin Netanyahu and the restive hard-right faction of his Likud party, members of which were vocal supporters of the initiative. Netanyahu, who recently emboldened his mandate by bringing the largest opposition party into his governing coalition, had urged the bill’s defeat and threatened cabinet members who voted for it with dismissal.

But few here saw the vote as a blow to the settlement enterprise at large, which Netanyahu vowed this week to “strengthen,” as the uproar grew over the fate of Ulpana, a settlement outpost where five apartment buildings are set to be removed.

To appease settlers and their supporters, Netanyahu said Wednesday that the buildings would be relocated to the nearby authorized settlement of Beit El, where he said he had also ordered the construction of 300 additional houses.

“I am committed to upholding the law, and I am committed to upholding the settlement enterprise, and I tell you that there is no contradiction between the two,” Netanyahu said. “Instead of hurting settlement, settlement has been strengthened.”

The announcement of new housing in Beit El drew censure from the Palestinians, who hope to build an independent state in the West Bank and have refused to conduct peace talks until the Israelis freeze settlement construction.

“This is happening at the expense of our rights and our land, and it’s undermining the two-state solution,” said Ghassan Khatib, a spokesman for the Palestinian Authority.

Under the proposal, which was defeated 69 to 22, Ulpana and other unauthorized settlements built on private property would have remained in place and Palestinian landowners would have been offered compensation. Netanyahu argued that the measure would erode the rule of law by defying Supreme Court rulings ordering the destruction of such outposts, and he warned that its passage would be condemned internationally.

While most foreign governments consider all settlements in the Israeli-occupied West Bank illegal under international law, Israel considers only those built without government permission to be illegitimate.

Over the past three days, settler organizations supporting the measure led a march from the West Bank to the Israeli parliament building in Jerusalem. Several hundred protesters gathered outside at midday Wednesday, and local media reported that demonstrators there and elsewhere clashed with police, blocked roads and burned tires.

Settlement leaders denounced the vote and told reporters that their protests would continue.