Netanyahu unveiled a sign at the proposed site of the settlement on Sunday bearing the name "Trump Heights," and thanked the US President for breaking with the international community to recognize Israeli sovereignty over the region.
"We are proud that we have the opportunity to establish a new settlement and to give thanks to a great friend," Netanyahu told a celebratory cabinet meeting at the site. "We will continue to grow and develop the Golan for all of our citizens -- Jews and non-Jews together."
The Golan Heights, which was seized by Israel from Syria during the Six-Day War in 1967 and annexed in 1981, is regarded as illegally occupied territory by the global community. The UN Security Council has deemed Israel's administration of the area "null and void and without legal effect," and the UN special envoy for Syria, Geir Pedersen, recently reiterated that position.
But Trump recognized Israeli sovereignty in the region in March, two weeks before that country's elections, in what was seen as a major political gift to Netanyahu. The US is the only country in the world to recognize Israeli sovereignty in the occupied territory.
At Sunday's unveiling, the Israeli leader went on to thank Trump for a number of pro-Israel decisions -- while also joining the US in blaming Iran for the attack on tankers in the Gulf of Oman last week.
"President Trump did it [with the Golan], he also did it with Jerusalem, he did it with the transfer of the embassy, he did it with the exit from the Iran nuclear deal, he does it now with the strong stand against the aggression of Iran in the Gulf of Oman, in the Persian Gulf, and in the entire region," he said.
US Ambassador to Israel David Friedman, who sat next to Netanyahu during the festive cabinet meeting, praised the decision.
"I want to thank you for holding the cabinet meeting and for the extraordinary gesture that you and the State of Israel are making to the President of the United States," Friedman said. "It's well-deserved, but it's much appreciated."
But opposition lawmakers in Israeli criticized Netanyahu's announcement as a public relations exercise.
"Whoever reads the fine print in this 'historic' decision understands that it is a phantom decision," Zvi Hauser, an advocate of international recognition of Israeli sovereignty in the Golan, said on Twitter. "There is no budget, there is no planning, there is no place, and there is really no binding decision," he added.