JERUSALEM (AP) -- Israeli Prime Minister Benjamin Netanyahu won the leadership race of his Likud Party over his ultranationalist rival early Wednesday, hours after his government approved new incentives to entice people to move to West Bank settlements.

While Netanyahu was expected to win the leadership race decisively, a relatively strong showing by his ultranationalist rival, Moshe Feiglin suggested that many Likud voters consider the prime minister too soft on peacemaking with the Palestinians.

Likud spokesman Yigal Movermacher said early Wednesday that Netanyahu won over 75 percent of the vote.

"Likud will continue leading the country responsibly. We face great challenges that no other country in the world faces and I believe we will overcome them together in the way of the Likud," Netanyahu said in his victory speech.

Upon taking office in 2009, Netanyahu reluctantly embraced the concept of an independent Palestinian state, antagonizing hard-line Likud loyalists who believe Israel should hold on to the West Bank for religious and security reasons.

The new housing subsidies offered to West Bank settlers appeared to be aimed at appeasing those hard-liners.

The Israeli move threatened international efforts to revive Mideast peace talks, just as U.N. Secretary General Ban Ki-moon was visiting the region, and drew angry condemnations from the Palestinians, who accused Netanyahu of undermining prospects for a Palestinian state.

"They are adding obstacles at a time when everyone is intensifying efforts to try to resume peace talks," said Palestinian government spokesman Ghassan Khatib.

A round of low-level peace negotiations hosted by Jordan ground to a halt last week, in large part because of continued Palestinian objections to Israeli settlement construction.

Those discussions, meant to finalize an agenda for full-fledged peace negotiations, are sponsored by the "Quartet" of international Mideast mediators -- the U.S., European Union, United Nations and Russia. U.N. chief Ban visited Jordan Tuesday en route to Israel and the Palestinian Authority in an effort to keep the dialogue moving.

"We must all do our part to break this impasse," Ban said. "In the short term, it is essential that provocations stop as called for by the Quartet and that the parties build confidence and sustain these nascent talks."

The Palestinians claim the West Bank and east Jerusalem, captured by Israel in 1967, as parts of a future state and say that continued Israeli settlement is a sign of bad faith.

They have demanded a halt in settlement construction before resuming peace talks. The alternative, they warn, is a single state in which Arabs will eventually outnumber Jews.

"I think with every additional settlement activity, the feasibility of having two states is diminished," said Khatib, the Palestinian spokesman.

This week‘s decision approved housing subsidies and loans for 557 communities deemed "national priority areas.’‘

An announcement in English made no mention that West Bank settlements were included in the order. But attached to the original Hebrew announcement was a full list that included 70 settlements, most of them deep inside the West Bank in areas that Israel would likely have to evacuate to make way for a Palestinian state.

The incentives, according to the Prime Minister’s office, are "meant to encourage positive migration to these communities."

In the past month‘s dialogue in Jordan, Israel has indicated that it wants to turn its West Bank separation barrier into the border with a future Palestine, according to two Palestinian officials. About three quarters of the settlements qualifying for the new subsidies lie on territory that would be turned over to the Palestinians under that scenario.

In a separate move, the government on Monday appointed a committee to examine land ownership issues in the West Bank.

The panel will review a 2005 government report that found several dozen outposts were built not only without state approval, but on privately held Palestinian land.

Officials said the report needs to be reviewed because its author, state prosecutor Talia Sasson, later entered politics with a dovish political party, raising questions about her objectivity.

A court-ordered evacuation of Migron, the largest unauthorized outpost, set for next month, would not be affected by the formation of the new committee, officials said.

The panel’s makeup aroused suspicions it would legalize at least some of the more than 100 outposts built without government authorization, including dozens Sasson says were erected on privately held Palestinian land.

The committee‘s head, former Supreme Court Chief Justice Edmond Levy, spoke out against Israel’s withdrawal of settlers from the Gaza Strip in 2005.