**Israeli Prime Minister Benjamin Netanyahu appears to have rebuffed US demands for a total freeze on settlement building in the West Bank.**He is quoted as saying he had told Washington he would instead consider “scaling down construction” .
The US has called on Israel to halt all construction work in a bid to restart peace talks with the Palestinians.
US Mid-East envoy George Mitchell is in the region to finalise terms for renewed peace talks.
The US hopes the Israeli and Palestinian leaders will meet on the sidelines of the UN General Assembly meeting in New York later this month.
Mr Mitchell said, after talks with Israeli President Shimon Peres on Sunday, that they were working hard to reach agreement on “many outstanding issues”.
‘Strike a balance’
Mr Netanyahu is reported to have laid out his position on settlement construction to the Knesset’s Security and Foreign Affairs committee on Monday.
“Jerusalem is not a settlement and construction there will continue as usual”
Benjamin Netanyahu
Obama Mid-East plans in jeopardy
He told them that Mr Mitchell had requested a complete halt to the building work.
“We made clear that we will build 2,500 housing units which are already in construction,” he is quoted as saying.
“A few days ago, we confirmed 450 additional housing units. I told the Americans that we shall consider scaling down construction.”
He said Israel would strike a balance between offering a gesture that would help restart peace negotiations and ensuring a “normal life” for residents in the West Bank settlements.
He also said that any scaling down of construction would be “for a temporary period”, not as yet agreed with the Americans.
“The Palestinians expected a complete halt to construction, a freeze, now it is clear that will not be,” he went on to say. “Jerusalem is not a settlement and construction there will continue as usual.”
The US has been preparing a package for peace talks that would see Israel halt settlement construction and Arab nations that have no peace deal with Israel take the first steps towards recognising Israel.
Palestinian leader Mahmoud Abbas insists he will not meet his Israeli counterparts until there is a freeze on the settlement of occupied territory, which is illegal under international law.
When news emerged of Israel’s plan to build 450 new homes last week, he said there was no point attending a summit with Mr Netanyahu.
Both Mr Abbas and the Israel prime minister are due to hold separate talks with Mr Mitchell on Tuesday.
Israeli-Palestinian peace talks have been suspended since December.
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