The reports were backed up by subsequent statements by Avi Dichter, a key ally of the prime minister, Ehud Olmert, in the Kadima party. The annexation plans, together with Hamas's electoral victory last month, deliver the coup de grace to the international peace blueprint known as the road map, unveiled three years ago.
The leadership of both sides now openly rejects negotiations and the road map's goal of a viable Palestinian state alongside a secure Israel. With the settlement blocs, Israel would protrude about 20km into the West Bank at several points and slice up the Palestinian area.
Israel's "primary goal" after the 28 March legislative elections will be to persuade the United States to agree to such an annexation in exchange for Israel unilaterally withdrawing from outlying settlements, Haaretz newspaper reported.
Israel would be able to argue that, with Hamas in power, the road map, to which it raised sweeping objections from the start, is now a dead duck. Hamas advocates Israel's replacement with an Islamic state, has carried out dozens of suicide bombings, and, unlike Mahmoud Abbas, the Palestinian president, rejects the road map's plan for a two-state compromise.
Mr Dichter, a former head of the Israeli security service, Shin Bet, is expected to take on a key security portfolio after the expected Kadima victory. He said that the unilateral pullout in the West Bank would consist solely of moving settlers from smaller settlements into larger "settlement blocs". The army, he told Israeli radio, would remain in place in the areas vacated "as long as there is no trustworthy Palestinian partner".
He said: "Going into settlement blocs will take a long time, but if, after that time, there is no Palestinian partner, the Palestinian Authority will find itself facing a state of Israel that has set its borders for itself, by itself."
Ismail Haniya, the Palestinian prime minister designate, from Hamas, said Palestinians would welcome any Israeli withdrawal while not compromising their other territorial claims. He said: "Let them withdraw. We will make the authority stronger on every inch of liberated land."
Palestinian politician Hanan Ashrawi said: "Israel has to be put into touch with reality: that there are Palestinians; that there is international law. Unilateralism leads only to further conflict, violence and extremism."
Israel's hard-line Likud party slammed Mr Dichter's plans, saying that vacating territory "gives a prize to Hamas".