Israel’s prime minister agreed on Tuesday not to invite tenders for West Bank settlement building in the coming months so as to advance the peace process, a government minister said on Tuesday, which critics fell far short of American demands for a settlement freeze.

Palestinians and other settlement critics dismissed the move as insignificant, pointing out that construction continues in a number of settlements in the Israeli-occupied Palestinian territory.

Israeli Prime Minister Benjamin Netanyahu, Defense Minister Ehud Barak and Housing Minister Ariel Atias agreed no new tenders for settlement construction in the West Bank should be invited until early 2010.

But officials stressed this did not amount to a formal government decision. They said the agreement included annexed Arab east Jerusalem, whose fate is one of the thorniest issues in the stalled Middle East peace talks.

"We believe there is no reason to strain relations with the United States and, as a gesture, we decided to temporarily suspend the issuing of new tenders for construction in the West Bank," an official told AFP.

He said this demonstrated "Israel’s willingness to move forward with the peace process."
 
"Natural Growth"

United States President Barack Obama’s administration has been pressing for a freeze of settlement construction as a vital step towards reviving peace talks that were relaunched in November 2007 but produced no tangible results before they again came to a halt just over one year later.

Israel had insisted it could not impose a total freeze as it needs to allow for "natural growth" and the row has brought relations with the United States, its closest ally, to their lowest ebb in years.

"Defense Minister Barak believes that Israel must be sensitive to the U.S. position and not let the pressure increase further," an official said.

The announcement comes ahead of planned Aug. 26 talks in London between Netanyahu and U.S. Middle East envoy George Mitchell.

A government official stressed that "not a single tender has been issued" since the Netanyahu government took office on March 31. In the first eight months of 2008, 588 such tenders were issued.

"Playing with Words"

But Palestinian negotiator Saeb Erakat insisted Israel "is playing with words in speaking of a freeze in housing construction tenders while continuing construction of 2,500 new houses in the settlements."

"Israel must stop all settlement activity without any conditions," he said.

The anti-settlement Peace Now group issued a similar statement, though it put the number of settlement homes under construction at 1,000.

"This means that on the ground there is no settlement freeze. A real freeze is the end of all construction, even those yet to be completed," it said in a statement.

The group confirmed that Israel has not issued any tenders for West Bank housing construction in months, but said government-sponsored construction only represents 40 percent of all construction in the occupied territory.

"Thus, even if there is a complete freeze of construction bids on behalf of the government, at least 60 percent of all construction in the settlements continues as before," Peace Now said.

About half a million Israeli settlers live in the West Bank, including east Jerusalem. The territory is home to more than three million Palestinians.

(Alarabiya.net and Agencies)