After a two year secret investigation by Israel’s security department,
it found that the building of illegal settlements has expanded rapidly,
and much of their construction has been on privately Palestinian land. Those who have seen the study commented that the findings of the investigation are “political and diplomatic dynamite.” 
The information has not been released and will not be released in an effort to protect the dignity of the Israeli state, especially in the eyes of the US. This comes after US Secretary of State Condoleezza Rice requested that Israel start to address the issues of illegal settlement expansion, the welfare of Palestinians and to better scrutinize the activities of the Israeli army. Chief of staff Dov Weisglass under agreed to her requests in writing, but the report is evidence of neglect in many cases.
Among the improvements needed was an up to date data base for the settlements, but the combined efforts of certain officials in the Civil Administration and the Israeli army have explicitly prevented any new information from being added to the computer. To address this, retired Brigadier General Baruch Spiegel, who had been assigned to deal with certain aspects in the territories, initiated a series of costly over flights of the territories to finish the database. 

The most shocking aspect of the investigation was the lack of information found in the Civil Administration’s database compared to that of the Americans. After finishing the investigation, Spiegel published a report on illegal settlements, which was made public in March 2005.

The real problem, according to one source, is with the older ‘legal’ settlements as “the construction there has been ongoing for years, in blatant violation of the law and the regulations of proper governance."

In 2003 Israel promised the US that it would stop constructing illegal settlements on Palestinian land and that all construction in the older settlements would be a natural expansion of neighborhoods rather than building in a completely new area.
Over this time period, studies show that Israel has completely reneged on its promise and instead did the exact opposite, building settlements on the edges of a settlement’s jurisdiction, which took more land than the planning charts show.

The study also found that most settlement construction took place on private Palestinian land and in many cases the private land had been set aside for future settlements, making the assumption that no matter what, settlers would have access.

More Palestinian land was annexed in order to protect the settlements, but again the land was annexed at the expense of Palestinian farmers who were suddenly denied access.

The threat of Spiegel’s study is serious and could have serious consequences for the government of Israel. One source commented, “Spiegel's study shows the real situation in the settlements themselves – and it is a lot more serious than what we knew to date.”

But because the army has no personal gain in filing correct and complete data, there is some concern that the information will be lost.

"The [defense] establishment does not necessarily have an interest in preserving this information. It may cause diplomatic embarrassment vis-a-vis the Americans and cause a political scandal. It is not unlikely that there will be those who will seek to destroy the data," one senior security official said.

The government is aware of the investigation and is apparently addressing the issue. The Defense Minister’s office released a statement that said, "the matter is being examined internally and staff work will be completed soon, and the parts of the report that can be published will be made available. The Defense Minister will discuss the matter with Prime Minister Ehud Olmert."

Sourced from Haaretz