A Channel 2 report on Monday night said a deal had been worked out to legalize Ramat Gilad and prevent any future attempts at demolition.
The report said five buildings slated for demolition would be moved several dozen meters, off land that Arabs dispute.
In return for moving the buildings, the state has agreed authorize the area as part of the city plan of Karnei Shomron, effectively turning the area into a new neighborhood for the town.
The plan was reportedly worked out between Minister Benny Begin and Yesha Council head Danny Dayan.
A report in the Hebrew Makor Rishon on Friday said that Begin had worked out the deal last week, but that Defense Minister Ehud Barak had decided to reject it – and raced to demolish the site.
Barak has been accused of trying to vitalize support for his breakaway Atzmaut party from the left side of the spectrum.
Israel has seen a rash of demolitions of Jewish communities in Judea and Samaria under the aegis of Barak's defense ministry, even as the government of Prime Minister Binyamin Netanyahu finds itself under intense pressure from faction heads in the ruling coalition and Likud lawmakers to avoid them.
Nonetheless, Netanyahu ordered a bill that would normalize the status of most communities in Judea and Samaria killed in committee on Sunday, due to opposition from state attorney general Yehuda Weinstein.
It is believed by many observers that Netanyahu is trying to appease diametrically opposed forces within the coalition as he prepares for early Likud primaries - in which he is expected to maintain his position at party leader.
Such a move could indicate Netanyahu is moving to secure his hold on the Likud at a time when the party is polling some 10 seats stronger than its current 27 – and at a time its rival Kadima is polling poorly.
Many analysts say holding elections ahead of the 2012 presidential vote in the United States could be necessary for Netanyahu should Barack Obama lead in the polls.
After his 2008 victory Obama launched a strident public relations campaign aimed at undermining the Netanyahu government in Israel - which some Israeli commentators likened to an attempted media putsch.
The move could also preface Netanyahu's need to address increasing pressure for significant decisions of national consequence vis-a-vis Iran's nuclear program and the Hamas terror enclave in Gaza.
However, observers note that Netanyahu's approach to the settlement issue remains an enigma and has allowed an incendiary issue for his government to escalate.
The absence of a clear policy and leadership of values from Netanyahu concerning the major national issues – like the settlements – could cost him the confidence of the national camp in the Likud at a time when he needs them most.