Prime Minister Benjamin Netanyahu said Sunday that Israel would likely reach a deal with the United States this week regarding settlement activity in the West Bank.

Netanyahu told Likud ministers that he would finalize a plan with U.S. special Mideast envoy George Mitchell during the latter's visit to the region.

Meanwhile, Defense Minister Ehud Barak was expected Sunday night to sign partial approval for 500 new housing units to be constructed in the West Bank, and authorize the rest the following morning.

The new units were to be constructed in six settlement blocs, including Har Gilo, Upper Modi'in and Ariel.

Netanyahu announced late last week that he intends to approve the construction of the new housing units in the settlements before the suspension of building takes effect, a declaration that drew criticism from the international community.

The prime minister held talks with several Likud cabinet ministers and Knesset members over the weekend, in an attempt to persuade them to support a freeze on construction in the West Bank settlements.

The security cabinet met on Sunday to continue its preparation for Mitchell's arrival later this week.

Ministers and MKs who spoke with Netanyahu and his associates told Haaretz that the prime minister showed them the final agreement reached with the U.S. administration on suspending settlement construction.

A source in the Prime Minister's Office said Netanyahu did not use the word "moratorium" or "freeze," opting instead to describe the proposed measure as "reducing the scale of construction."

Netanyahu's announcement that he would approve new settlement construction before the suspension of building takes effect drew criticism from the international community.

The European Union and Britain both slammed the declaration and reiterated their calls for a total settlement freeze.

The White House also criticized the announcement saying: "Continued settlement activity is inconsistent with Israel's commitment under the road map."

The White House added that the administration of President Barack Obama "does not accept the legitimacy of continued settlement expansion and we urge that it stop. We are working to create a climate in which negotiations can take place, and such actions make it harder to create such a climate."

In response to a reporter's question, the White House spokesman said that the U.S. had been informed of Netanyahu's intention to proceed with new construction in the West Bank.

State Department spokesman Ian Kelly said Mitchell and the Israelis had been having "a very open dialogue" in "very intense discussions." He would not elaborate.

But one U.S. official familiar with Mitchell's meeting last week in New York with Netanyahu envoy Yitzhak Molcho said the Israelis "told Mitchell they were going to [continue construction] and he told them they could expect a sharp response."

Deputy PM: Settlement freeze is 'strategic delay'

Deputy Prime Minister Eli Yishai called the planned freeze in settlement construction a "strategic delay," implying the move would not be a long-term Israeli policy.

"The postponement in construction is a strategic delay," said Yishai at the start of the weekly cabinet meeting. "We won't give up on building in Jerusalem and will still build hundreds of construction units. We are looking ahead, here."

Yishai, who is also the interior minister and the head of the ultra-Orthodox Shas party, added: "Over the past two decades, the Palestinians violated all the agreements. We don't see Abu Mazen leading toward a peace deal."

The minister was using the nom de guerre of Palestinian President Mahmoud Abbas, who said last week that he would not engage in peace talks with Netanyahu unless Israel completely halt settlement construction.

U.S. President Barack Obama has also been pressuring Netanyahu to agree to a settlement freeze; Israeli envoys flew to New York last week to discuss a possible deal on the matter.

National Infrastructure Minister Uzi Landau, of the rightist Yisrael Beiteinu, stressed his opposition to the proposed move at the meeting Sunday. "We mustn't speak about the freeze at all," he said.

"There is neither political wisdom nor diplomatic wisdom in this. The Bar Ilan speech will just result in the radicalization of the Palestinians. The prime minister didn't speak with me and didn't explain to me the plan, and I don't know exactly what it is."

Landau was referring to Netanyahu's first policy speech delivered in June, in which he supported the establishment of a demilitarized Palestinian state on the condition that the Palestinians recognize Israel as a Jewish state.

Social Affairs Minister Isaac Herzog, meanwhile, called on the opposition Kadima party and rebels within his own Labor to support Netanyahu in his talks with the United States, Israel Radio reported. But he added that if Netanyahu is only "wasting time," Labor would reach the necessary conclusions.

Settlers to step up protests

Meanwhile, settlers are planning to step up their protests against the construction freeze, irrespective of Netanyahu's announcement of approval for hundreds of new homes in the settlements.

Settler leaders said 500 housing units will be built in places such as Givat Ze'ev, Ma'aleh Adumim and Beitar Ilit, where demand is enormous, and in Gush Etzion.

"The demand is for hundreds of housing units in each of these communities, not just a few hundred in total. The construction will probably take place to the east of the fence," according to Danny Dayan, chairman of the Yesha Council.

"A freeze has enormous political implications which are no less than a catastrophe for the settlement enterprise. Freezing construction in Ma'aleh Adumim, Gush Etzion, Beitar, what are called the 'settlement blocs,' places them clearly on the negotiating table. Why would the state freeze construction in areas that are not open for negotiation? There is nothing that signals to the Arabs that it is possible to restore them to the 1967 border than such a freeze," Dayan said.