Netanyahu was speaking to the former UK PM, who is now a Middle East envoy
The leader of Israel's right-wing Likud party, Binyamin Netanyahu, says he would continue to expand settlements in the West Bank, but not build new ones.
The remarks to Mid-East envoy Tony Blair come in the run-up to Israel's general election next month which Likud is favourite to win, polls suggest.
Settlements in the West Bank and Golan are considered illegal in international law, though Israel disputes this.
Past Israeli governments have backed "natural growth" of settlements.
Correspondents say the statement may be an attempt to placate the international community before the arrival of George Mitchell, the newly appointed US envoy to the Middle East.
"I have no intention of building new settlements in the West Bank," Netanyahu told Mr Blair in quotes carried by Haaretz newspaper.
"But like all the governments there have been until now, I will have to meet the needs of natural growth in the population. I will not be able to choke the settlements."
The expansion of Jewish settlements violates the internationally-backed peace plan known as the roadmap, which has served as the basis for Israeli-Palestinian negotiations that resumed in 2007.
Palestinians cite Israel's settlement activity on land captured by Israel in the 1967 war as a major obstacle to a two-state solution to the Middle East conflict.
However, past Israeli governments have rejected the international legal arguments and in peace talks have sought to keep their big settlement blocs in East Jerusalem and the West Bank which house hundreds of thousands of Israelis.
Mr Netanyahu also reiterated his pledge to shift the focus of talks with the Palestinians to economic development rather than statehood.
He reportedly told Mr Blair he would deal with the Palestinian issue "very intensively."
Mr Blair's reaction to Mr Netanyahu's statement is not recorded. During a visit to Ramallah on the same day, he welcomed Mr Mitchell's appointment as US envoy.
"I see this as a partnership between America on the one side and the international community on the other... to make sure that we get the help to people in Gaza, then that we set about revitalising the process toward negotiation, leading to (Palestinian) statehood," Mr Blair said.