The purpose of this thesis is to identify the nature of initial Israeli settlement development in occupied Palestinian territory from the perspective of the U.S. government. Israeli settlements are a primary impediment to the Israeli-Palestinian conflict, and this thesis demonstrates how they came into existence. The development of Israeli settlements however are not an isolated phenomenon, therefore they are linked to the geopolitical watershed that is the 1967 War. In order to demonstrate that Israeli settlements are linked to the regional conditions that followed the 1967 War this thesis will analyze the international negotiations that followed the war through the perspective of U.S. foreign relations documents. This was predicated by President Johnson's foreign policy ideals and his desire to establish a close relationship between the U.S. and Israel. The research demonstrates that President Johnson's policy reformulation enabled Israel to create settlements in the occupied Palestinian territories. Johnson's policy alteration was intended to establish peace and security in the Middle East, but the non-uniform goals of his administration prevented this. The Middle East therefore, is currently experiencing the long term effects of President Johnson's Middle Eastern foreign policy reformulation.