Defense Minister Ehud Barak said Monday that Israel must secure a deal with the Obama administration to pull the Palestinians back to the negotiating table, in order to keep the upper hand in the Middle East peace process.

The defense minister's remarks come a day after Prime Minister Benjamin Netanyahu presented his cabinet with an American proposal for a new 90-day Israeli moratorium of settlement construction in the West Bank, in exchange for certain incentives from the U.S., including the purchase of 20 new warplanes. The proposal, which Netanyahu says has not yet been finalized, was met with opposition from many Likud ministers and Knesset members.

"There are two options," Barak told Army Radio. "Either we reach understandings with the Americans to find a way to force the Palestinians to sit around the negotiating table, or the Palestinians and the Arab world will reach understanding with the Americans and it will be us eating frogs."

The deal includes a U.S. undertaking not to request a further extension of the freeze, and to veto any attempt by the Palestinians to win United Nations recognition of their state unilaterally.

The Obama administration would also ask Congress to approve the sale of the 20 F-35 warplanes to Israel and, should there be a peace deal with the Palestinians, guarantee its wider security needs.

"The fact that the Americans are willing to put guarantees on the table is a very serious achievement for the prime minister," Barak told Army Radio on Sunday, adding that the benefits of the American offer outweigh any internal political considerations.

"We wanted 40 planes, but due to [defense] budget cuts, we could only afford 20, at a price of three billion shekels," Barak said. "The Americans are now offering to complete the deal in return for a 90-day freeze. Furthermore, if we reach an agreement they are offering us a deal six or seven times larger."

Meanwhile, an unnamed diplomat told The Associated Press on Monday that Israel would be allowed to complete construction of hundreds of homes in West Bank settlements under the new U.S.-proposed settlement moratorium.

That original moratorium, which expired in September, did not apply to some 3,000 apartments already under construction. The diplomat says the new three-month slowdown, if approved, would also not apply to those homes.

The diplomat's country of origin was not clear from the report.

Netanyahu has found much opposition to the American offer from the right-wing members of his coalition. Nevertheless, he will apparently be able to muster a majority of his diplomatic-security cabinet to approve the incentive package.

But Barak dismissed Likud opposition to the deal as short-sighted.

"Twenty planes are of incomparable importance to momentary smiles between Bibi and his Likud MKs," Barak told the radio, referring to the prime minister by his nickname.

Shas chairman Eli Yishai said Sunday that his party would abstain from a vote in the matter and enable it to pass in cabinet "if it is made clear in a letter from the president of the United States that construction will take place in Jerusalem immediately, and that after 90 days, it will be possible to build everywhere, without restrictions."

Shas' abstention would presumably give Netanyahu a 7-6 majority for the freeze, since votes in favor are expected from himself, three other members of his Likud party (Yuval Steinitz, Gideon Sa'ar and Dan Meridor ), both Labor ministers (Barak and Benjamin Ben-Eliezer ) and Yaakov Neeman, an independent affiliated with Yisrael Beiteinu. The six opponents are expected to be the three Yisrael Beiteinu ministers (Avigdor Lieberman, Uzi Landau and Yitzhak Aharonovitch ) and the three remaining Likud ministers (Moshe Ya'alon, Silvan Shalom and Benny Begin ).

Netanyahu briefed his forum of seven top ministers on the American proposal Saturday night and the rest of the cabinet on Sunday morning. But he said the package is not yet final; certain details remain to be worked out.

"When the work is finished, I'll bring the matter to the diplomatic-security cabinet for a discussion and vote," he promised.