The aim of this research was to accurately estimate the cost of West Bank (WB) settlements to the State of Israel. Most of the costs analyzed were governmental costs through budget expenditures which are higher than in localities west to the Green Line – extra expenditures. The extra expenditures were allocated to settlements west of the defense barrier and east of it, in order to analyze the difference in expenses between the two areas. In addition we also assessed the long-term value of both private and public investment in the West Bank through the capital stock of buildings constructed there. Regarding governmental investment in the housing market, we compared the public initiated housing construction in West Bank settlements to other parts of the country.