Israel's prime minister says it will legalize an isolated West Bank outpost in response to the murder of one of its residents.

Prime Minister Benjamin Netanyahu told his weekly Cabinet meeting on Sunday that those who try to "break our spirit and weaken us made a grave mistake." He says his government will legalize Havat Gilad to "allow the continuing of normal life there."

Earlier this month, Havat Gilad resident Rabbi Raziel Shevah, a 35-year-old father of six, was shot dead from a passing vehicle as he drove near his home in the unauthorized settlement outpost near Nablus. The community of a few hundred Israelis is located deep inside the West Bank.

The anti-settlement Peace Now group says the effort to legalize it is a "cynical exploitation of the murder."