after US President Donald Trump.
At a naming ceremony on Sunday, Netanyahu honored Trump Heights for his decision to recognize Israel's sovereignty over the territory. The name and flag of the US and Israel were revealed.
Critics called the move a publicity stunt without legal authority.
Israel seized the Golan in the 1
967 Middle East war from Syria. In March, the US became the first country to recognize Israeli sovereignty over the area since it was annexed by Israel in 1981.
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"This is a historic day," Netanyahu said welcoming President Trump as "friend of Israel."
US Ambassador David Friedman, who attended the ceremony, called the settlement "well-deserved, but much appreciated."
Israel's prime minister promised in April to designate a new settlement after Trump shortly after the president overthrew decades of US policy and recognized Israel's sovereignty over the Golan.
The region is located about 60 km southwest of the Syrian capital, Damascus, and covers about 1,000 km².
The new settlement is expected to be built near Kela in the northern Golan Heights.
On Sunday, the Israeli Cabinet approved Mr. Netanyahu's resolution on an "Initiative to Establish" a New Golan Heights Community.
However, the resolution does not announce the establishment of a settlement, and no money has yet been earmarked for construction.
Political opponents of the settlement have also noted that no new places can be built in September before the elections in Israel.
"Anyone who reads the fine print in this 'historic' decision will understand that this is nothing more than a non-binding, fake policy," said former Cabinet Secretary Zvi Hauser of the Times of Israel.
"Let's hope President Trump does not know his name is used for this PR exercise," he added.