Is this just a gesture of support for Netanyahu? Because whether those settlements are illegal is a matter of international law, and Pompeo doesn't get to decide that.
I think so, yes. There have been two elections in Israel this year: the first one in May, which was a normal one. Netanyahu failed to build a government due to a very split parliament and not having a big majority on his own, so after five months he admitted failure and they had a new election in September.
Hence again Bibi got no big enough majority on his own and he failed to build a government; so at the moment the opposition leader has the task to build one. If he also should fail, which seems likely, the parliament can just appoint somebody prime minister.
And guess who just would like to be that... also since he's got some charges being filed against him. Would he loose his immunity, justice would start doing its job.