An Israeli army committee has recommended stopping the practice of demolishing the houses of Palestinian suicide bombers and their families.
Rights groups say many homes are demolished for "military reasons"
The committee's interim report found the policy had little deterrent effect and inflamed Palestinian hatred.
In the past four years of the Palestinian uprising, Israeli soldiers have destroyed hundreds of homes.
The Israeli government argues that demolitions deter attacks as bombers do not want to leave family homeless.
The committee's interim findings have been presented to Israeli army Chief of Staff Moshe Yaalon, who has requested more information for the final draft.
In the past four years, Israeli soldiers using bulldozers or explosives have demolished 666 houses as punishment for attacks on Israelis, according to the Israeli human rights group Btselem.
The committee did not look into the demolition of homes, mostly in Gaza, which the Israeli army has argued is needed to make army posts, settlements or roads used by settlers safer.
Over the last four years, Btselem says, 1,356 houses in the occupied territories were demolished by the Israeli army for what the group calls "alleged military purposes", making more than 10,000 Palestinians homeless.
Palestinians in the occupied territories, including East Jerusalem, complain that the Israeli authorities make it very difficult for them to gain licences for new buildings or extensions on existing properties.
According to Btselem, 253 Palestinian homes were demolished in 2004 because they did not have the correct licences.