Yet the settlements are Jewish only.
Well, no. Its far more complicated than that.
Like ALL OF ISRAEL, both Jews and Arabs live in Area C. They tend to live in segregated towns and the reasons for that are many and complicated: security concerns, intifadas, competing national liberation movements, deeply held discrimination on both sides, agricultural lifestyles vs. urban lifestyles, family ties, religious motivations...I can go on and on and on, but you get the idea.
There is absolutely nothing, in law, preventing Arab Israelis from buying a home, a piece of land, an apartment or an entire city-sized parcel to build in Area C.