Jerusalem, March 8 (IANS): Israeli Prime Minister Benjamin Netanyahu said that Israel would agree to give up "some settlements" in the occupied West Bank in order to reach a peace agreement with the Palestinians.

"Obviously some of the settlements won't be part of the agreement, everybody understands that," Xinhua quoted the prime minister in an interview which will be broadcasted Saturday on Israel's Channel 2 news.

Netanyahu has for the first time stated his willingness to exchange settlements for peace.

The settlements built on Palestinian land captured by Israel in the 1967 Mideast War, are deemed by international law as illegal and are dubbed by the international community as an obstacle to peace.

The settlements are a core issue in the negotiations between Israel and the Palestinians, which restarted last July after a three-year halt over Israel's settlement construction on the West Bank.

Despite the peace talks, Israel has increased construction in the settlements.

According to figures released by Israel's Central Bureau of Statistics earlier this week, Israel started building 2,354 housing units in the settlements throughout 2013, a 123 percent rise from 2012.