I’m no diplomat but having the government officially annex it sure seems like an escalation. Many (most?) of those settlements are illegal even under Israeli law* so the way to legitimize them is to annex the territory, because “it doesn’t have a government now”.
* According to Wikipedia, Israel’s Supreme court has said repeatedly (until 2012 at least) that the settlements are illegal, apparently against the word of the Executive branch of the government. And then last year, this: https://en.wikipedia.org/wiki/2023_Israeli_judicial_reform
Singing meat!?