Israel's prime minister has announced a 10-month suspension to the construction of new settlement houses in the occupied West Bank. Binyamin Netanyahu told a news conference on Wednesday that he declared the limited halt "out of broad national interests with the aim of encouraging negotiations with our Palestinian neighbours".
"When the period of freeze ends my government will return to the previous policy of building in Judea and Samaria," Netanyahu said, using the Jewish names for the occupied West Bank.
The Israeli proposal excludes areas of the West Bank that Israel annexed to its Jerusalem municipality after occupying the territory in the 1967 Middle East war and building projects already under way.
Al Jazeera's Jacky Rowland, reporting from Jerusalem, said that the suspension would only apply to "new residential permits and new residential starts".
"We are only talking about housing here. This freeze does not apply to public buildings such as schools or police stations or whatever, and it also means any existing building permits that have been granted they will go ahead," she said.
"Any construction which has already begun, any construction sites where the cement mixers are already whirring and the cranes are at work they will continue."
Palestinian rejection
A spokesman for Mahmoud Abbas, the Palestinian president, earlier dismissed the Israeli plan after details of it were outlined in a statement from Netanyahu's office.
"Any return to negotiations must be on the basis of a complete settlement freeze, and in Jerusalem foremost," Nabil Abu Rdainah said.
Referring to Jerusalem in Wednesday's news conference, Netanyahu said: "My position it is well known, I do not impose any restriction on building in Jerusalem."
The West Bank-based Palestinian Authority, led by Abbas, has refused to return to peace talks with the Israelis until Netanyahu orders a complete to all settlement building work in the West Bank and East Jerusalem.
Before Netanyahu's news conference, Ehud Barak, the Israeli defence minister, told the security cabinet that the proposal was an attempt to "keep open a window to the resumption of the negotiation process" with the Palestinians.
"Israel is strong and determined, but time is not necessarily on our side, and it is important to move towards two states for two people, through agreement. All other options are much worse," he said.
Washington has been pressing Israel to freeze settlement construction in order to allow the talks, which have been on hold since Israel launched its 22-day offensive in the Gaza Strip last year, resume.
Mixed US reaction
George Mitchell, the US special envoy to the Middle East, called the 10-month suspension "significant".
"It falls short of a full settlement freeze, but it is more than any Israeli government has done before," he said.
"It falls short of a full settlement freeze, but it is more than any Israeli government has done before" George Mitchell, US special Middle East envoy
"As President Obama has said many times, we believe that a two-state solution to the conflict is the best way to realise the shared goal of Israelis and Palestinians to live in peace and security.
"That's why we have urged the Palestinians to expand and improve their security efforts. And it's why we've urged Israel to stop settlement activity."
The Palestinians and the US had previously dismissed an Israeli proposal that would have seen a halt to new settlement construction, but allow what Israel calls "natural growth" to provide for settlers as their population rose.
Al Jazeera's Nour Odeh, reporting from the West Bank town of Ramallah, said that Washington's apparent softening on the issue in recent weeks had "deeply disappointed the Palestinian public and the Palestinian president".
"There was a lot of hope attached to this Obama presidency," she said.
"A lot of people really believed his statements and his promises that the Obama administration would be balanced and that it would really seek a firm start to a political process that would lead to Palestinian statehood within two years.
"Now most Palestinians, if not all, feel let down."
About 500,000 Jews live in the West Bank and annexed areas around Jerusalem alongside 2.7 million Palestinians.
Palestinians say the settlements deny them the possibility of a viable state by cutting off Palestinian areas from each other.
The prime minister of Israel, Binyamin Netanyahu, told a news conference earlier today that there will be a ten-month stop in the construction of new  settlement housing in the West Bank. The Israeli cabinet approved the move by a margin of eleven to one.

File photo of Israeli Prime Minister Binyamin Netanyahu."We have been told by our friends that once Israel takes the first meaningful steps towards peace, the Arab world and the Palestinians will follow," said Netanyahu following the cabinet's endorsement of the move. "Well, the government of Israel has taken a very big step towards peace today, and I hope the Palestinian and the Arab world will work with us to forge a new beginning for our children and theirs."

The freeze was made "out of broad national interests with the aim of encouraging negotiations with our Palestinian neighbours," he continued. "When the period of freeze ends my government will return to the previous policy of building in Judea and Samaria the Jewish name for the West Bank."

"This is a far-reaching and painful step ... We hope that this decision will help launch meaningful negotiations to reach an historic peace agreement that will finally end the conflict between Israel and the Palestinians," Netanyahu later said.

Under the plan, construction permits for new residential buildings would be put on hold for ten months.  The government said that "natural growth" — characterised by the construction of homes by young people, who were raised in the settlements and want to build houses for their own families — would be exempt from the freeze. Parts of the West Bank that Israel annexed to the Jerusalem municipality would also be excluded from the freeze. The building of schools and places of worship, which will enable settlers to live what Netanyahu described as "normal lives", will also continue.

"We will not halt existing construction and we will continue to build synagogues, schools, kindergartens and public buildings essential for normal life in the settlements," he commented.

The prime minister added that there would be no change to Israel's existing policy on the issue of Jerusalem. "Regarding Jerusalem, our sovereign capital, our position is well-known.  We do not put any restrictions on building in our sovereign capital," he said.

Several members of the Israeli cabinet expressed their disapproval at the proposal, with the conservative, ultra-Orthodox Shas party boycotting the cabinet meetings.

"I think it's a complete crumbling of Netanyahu's position and is contrary to all of his electoral promises. He promised an end to unilateral steps, and here we see him after only a few months in office giving up, even though there is no reciprocity from the Palestinians," said the head of the main settler lobby, Danny Dayan, to the Christian Science Monitor. We are 300,000 citizens, living in 150 communities. It is impossible to freeze us. I don't how it will happen, but we will break this freeze."

Many Palestinians also criticised the proposal, mainly because East Jerusalem was not included in the settlement freeze. Nabil Abu Rudeineh, a Palestinian spokesman, said to the Wafa news agency that Palestine “rejects returning to peace talks without the complete cessation of settlement activities in the West Bank and Jerusalem.”

Palestinian prime minister Salam Fayyad also rejected the plan. "The exclusion of east Jerusalem is a very, very serious problem for us. We are not looking for the resumption of the process just for the sake of it, for it to falter a week or two down the road,"

Israel captured East Jerusalem from Jordanian control, following Israel's victory in the 1967 Arab-Israeli War. The Jewish state annexed that part of the city in a move that was not recognized by the international community.

Earlier this week, on a visit to Argentina, Palestinian President Mahmoud Abbas stepped up his campaign to put international pressure on Israel to stop building on lands that Palestinians say are their own. Abbas urged US president Barack Obama, as well as leaders of other nations that support Israel, to press the Jewish state to end its construction of settlements on occupied lands.

Netanyahu has in the past offered to restrain settlement growth, but today's announcement was the first time that he set a clear timeframe.