JERUSALEM (AFP) - Israel on Sunday postponed talks on a plan to compensate West Bank settlers who agree to relocate as part of a future peace agreement with the Palestinians, army radio reported. Israeli Prime Minister Ehud Olmert had earlier insisted the issue of the voluntary relocation of some of the estimated 260,000 Jewish settlers in the occupied West Bank was part of US-backed peace talks relaunched last year. "We will not bring the issue to a decision today," Olmert said ahead of a weekly cabinet meeting. "But at a time when serious and continuing diplomatic negotiations are being held, it should be clear to everyone that they will likely - at some (point) - lead also to the need to make decisions that will entail the relocation of residents from the places in which they live. "I think that it is good to begin thinking about these issues and to see how we can prepare for them properly," he added. Israel and the Palestinians have been holding formal US-backed peace talks since November 2007 aimed at resolving their decades-old conflict by the time US President George W. Bush leaves office in January 2009. The Jewish settlements in the occupied West Bank, including annexed east Jerusalem, are illegal under international law.