Apparently, no matter whether Israeli cities are located within its pre-1967 "occupation" borders or not, they are all merely "settlements." From CAMERA Snapshots (no relation):
In the BBC mindset, terrorists rocketing civilians in the southern Israeli city of Sderot are simply "militants targeting settlements." That is how BBC explains the situation.
A Jan. 28th aricle on BBC's Web site, "Fresh efforts to seal Gaza border" explained Israel's blockade on Gaza as follows:
Israel began tightening its blockade of the Gaza Strip after an increase in rocket attacks by militants targeting its settlements near the border.
Israel withdrew its military and civilian settlements from the Gaza Strip in 2005. Sderot—the prime target of Palestinian rocket and mortar fire—is a city in the western Negev, well within Israel's pre-1967 borders. Yet it is still a "settlement" to BBC journalists who consistently label Israeli settlements "illegal under international law". Does this mean that BBC now considers all of Israel to be "illegal under international law"?