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.