RNA - The bill would absorb major Israeli settlements currently in the occupied West Bank into Jerusalem by enlarging the city limits, New Arab reported.
It had been expected to be voted on by a ministerial committee on Sunday, a move which would fast-track its progress through parliament.
All settlements in the occupied West Bank are considered illegal under international law, as is the formal annexation of land seized during war.
Some report said the reason behind the adjournment is that the needs "diplomatic preparation and thus will be postponed for the moment", declining to elaborate further.
It is the first signal that Netanyahu wants to discuss the bill with the United States, which has been seeking to restart Israeli-Palestinian peace talks which have been frozen since negotiations collapsed in 2014.
Opponents of the bill argue that it is the first step towards the full unilateral annexation of West Bank settlements.
The Jerusalem-area settlements included in the bill are Maale Adumim, Beitar Illit, Efrat, Givat Zeev, and the Gush Etzion settlement bloc.
Israeli Intelligence and Transportation Minister Yisrael Katz, who has pushed for the bill, says it would add an additional 150,000 people to Jerusalem's population, strengthening its Jewish majority.
Israel occupied the West Bank, including East Jerusalem, in the Six-Day War of 1967. It later annexed the eastern section of the city in a move never recognised by the international community.
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