Israel says no building freeze in Jerusalem

Israel insists it would keep building homes in disputed east Jerusalem.

Jerusalem: Israel on Thursday insisted it would keep building homes in disputed east Jerusalem, threatening to hold up a US-proposed settlement construction moratorium designed to renew deadlocked Mideast peacemaking.

The contours of the moratorium deal, as presented by Israeli officials after Prime Minister Benjamin Netanyahu returned from the US last week, had appeared to be clearly agreed upon.

Washington, they said, had agreed to exclude the eastern sector of the holy city from the 90-day moratorium and there would be no further demands for construction curbs in the West Bank when the latest moratorium expired.

On Thursday, however, a day after Netanyahu said a deal was imminent, the US still had not sent a promised letter detailing the understandings on the proposed moratorium.

In Washington, a senior Obama administration official said the US and Israel were still "haggling" over details of the written assurances. The official said most of the unresolved issues were relatively routine but added that it was unlikely that the letter would be finished on Thursday.

The official, who spoke on condition of anonymity because he was not authorised to speak publicly about the matter, said it was not clear when the letter might be completed.

In a speech yesterday, Netanyahu suggested agreement was neither imminent nor inevitable. He said he has been holding intensive contacts with the Obama administration since his meeting with US Secretary of State Hillary Rodham Clinton a week ago.

"The objective is to formulate understandings through which we can promote the political process while maintaining the vital interests of the state of Israel, primarily security," Netanyahu told students at the Technion, a technology school.

"If I accept such an offer from the US government, I will bring it before the Cabinet and I have no doubt that my fellow ministers will accept it."

Earlier yesterday, Netanyahu spokesman Mark Regev said any future moratorium would not apply to Jerusalem, whose eastern sector was annexed by Israel in 1967 in a move not recognised by the international community.

He noted that an earlier settlement slowdown, whose expiration in September led to the current impasse in peace efforts, did not include Jerusalem.

"Israel makes a clear distinction between the West Bank and Jerusalem," Regev said. "Jerusalem is our capital and will remain as such. The previous moratorium did not apply to Jerusalem...If there is a future moratorium, it will similarly not apply to Jerusalem."

PTI

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