Israel tonight proposed a 10-month partial halt to settlement building on the occupied West Bank as a prelude to restarting peace talks, but Palestinian officials were quick to dismiss it as unacceptable.
Binyamin Netanyahu, the Israeli prime minister, said the offer was a policy of "restraint" that was in Israel's national interest. "This is a far-reaching and painful step. We authorise it because of our deep desire to move forward towards peace," he said in a televised press conference. He wanted a "historic peace agreement to finally end the conflict".
It did not seem likely to bring the two sides together. Even before it was publicly announced, Palestinian officials said only a full halt to all settlement building – in line with Israel's obligations under the 2003 US road map – would allow peace talks to restart for the first time in a year.
Netanyahu's offer does not include east Jerusalem, which Israel captured in 1967 and is now home to more than 200,000 Jewish settlers. It also does not include what are thought to be around 3,000 homes where work has already begun or where permits for work have been issued, and nor does it include any public buildings such as schools or synagogues.
Israel proposed "a 10-month suspension of new residential construction permits and new residential construction starts in Judea and Samaria", the government said, using the Israeli term for the West Bank.
Netanyahu talked of roadblocks that had been taken down and "bureaucratic obstacles" removed to allow Palestinian economic development. He insisted the Palestinians still needed to recognise Israel as a "Jewish state".
"Israel today has taken a far-reaching step towards peace. It is time for the Palestinians to do the same," he said.
Salam Fayyad, the Palestinian prime minister, said any offer that did not include east Jerusalem was a non-starter. "The exclusion of east Jerusalem is a very, very serious problem for us," he said. The Palestinians wanted a peace process to begin again, but only in the right circumstances.
"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," he said. There appears to be general agreement among senior Palestinian leaders that talks should not restart without a full settlement freeze.
At the start of this year the US administration pressed Israel for a complete halt to settlement building. In recent months Netanyahu's government has felt confident that it had resisted American pressure. Washington has scaled back its demands, asking instead merely for Israeli "restraint".
That was such a profound disappointment for the Palestinians that this month Mahmoud Abbas, the Palestinian president elected on a platform of winning independence through negotiations, announced he did not want to run for re-election and criticised the lack of support from Washington.
Nearly two decades of talks have failed to bring the Palestinians their independent state. The occupation continues and the number of Israeli settlers has grown to nearly 500,000 in east Jerusalem and the West Bank, even though settlement on occupied land is illegal.
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.