Israeli Prime Minister Benjamin Netanyahu said a site for a promised new settlement to be named after US President Donald Trump in the occupied Golan Heights has been chosen and formal approval is underway.

A sign for tourists shows the direction to Jerusalem, Amman, Damascus, and Baghdad among other destinations at an army post on Mount Bental in the Israeli occupied Golan Heights on March 22, 2019. (File Photos: VCG)

Netanyahu pledged such a move last month in appreciation of Trump's recognition of Israel's claim of sovereignty over part of the strategic plateau seized from Syria in the 1967 Six-Day War.

"I promised that we would establish a community named after President Trump," Netanyahu said at the start of the weekly cabinet meeting on Sunday.

"I would like to inform you that we have already selected a site in the Golan Heights where this new community will be established, and we have started the process," he said.

Trump broke with longstanding international consensus on March 25 when he recognized Israel's claim of sovereignty over the part of the Golan it captured during the 1967 war.

Israel annexed 1,200-square kilometers of the Golan it seized in 1981, a move never recognized by the international community.

Trump's controversial move came after the US president in December 2017 said Washington would recognize the disputed city of Jerusalem as Israel's capital, sparking outrage among Palestinians who claim Israeli-annexed East Jerusalem as the capital of their future state.

Druze people take part in a rally in Majdal Shams near the ceasefire line between Israel and Syria in the Golan Heights, overlooking the other side of the border, October 6, 2018.

The US Embassy was moved from Tel Aviv to Jerusalem and inaugurated on May 14, 2018.

About 18,000 Syrians from the Druze sect – most of whom refuse to take Israeli citizenship – remain in the occupied Golan.

Some 20,000 Israeli settlers have moved there, spread out over 33 settlements.

Netanyahu said he would submit the new settlement plan for cabinet approval when a new government takes office in the wake of last month's snap general election.

The prime minister has been conducting low-key meetings with heads of the parties expected to join his coalition and has until the end of May to put together an alliance.