Prime Minister Benjamin Netanyahu said Wednesday he was close to reaching an understanding with the United States regarding a package of incentives Washington will offer in exchange for a 90-day construction freeze in the West Bank.

Netanyahu's office issued a statement late Wednesday saying he hopes to conclude contacts with the U.S. soon in order to bring present the deal to his 15-member Security Cabinet - a group of senior government ministers split between pragmatists and hard-liners.

"The prime minister will, with great determination, bring it before the Cabinet for a positive decision," his bureau said in the statement. Officials close to Netanyahu said he would convene his cabinet within 24 hours to approve the deal.

Netanyahu's office also in a statement that "discussions with the United States over the formulation of the document of understandings does not involve Jerusalem," apparently contradicting the premier's assurances to the inner cabinet that East Jerusalem would explicitly not be included in the freeze.

According to senior government officials in Jerusalem, the confusion stems from the fact that the U.S. administration had intended to write in the document that the freeze would have the same characteristics as the previous one, without relating to Jerusalem.


Army Radio reported Wednesday, however, that a draft of the agreement commits Israel to halting all building in the West Bank and coordinating any plans for East Jerusalem construction with the U.S. for a period of three months. In exchange, the U.S. will give Israel 20 next-generation stealth fighter planes, according to Army Radio.

Defense Minister Ehud Barak has also reportedly promised Shas that he will release tenders for hundreds of apartment units in settlements following the 90-day freeze in order to seal the ultra-Orthodox party's support for the deal, according to Army Radio.

U.S. Secretary of State Hillary Rodham Clinton, who presented the proposal to Netanyahu last week, declined to comment Wednesday on the demand for a written guarantee, saying only that efforts to revive the peace talks were continuing.

"We are working intensively to create the conditions for the resumption of negotiations that can lead to a two-state solution and a comprehensive peace," she said during a news conference with British Foreign Secretary William Hague in Washington."

On Wednesday a U.S. official indicated that the Obama administration was drafting the diplomatic and security assurances geared toward renewing the settlement freeze.

"It was always envisioned that there would be a letter detailing our understandings," the official said. "We are nailing down the specifics."

The official spoke on condition of anonymity to describe the sensitive diplomacy involved in persuading Israel and the Palestinians to resume stalled direct peace talks.

Netanyahu met with Shas Chairman Eli Yishai and Minister Ariel Attias earlier Wednesday in a bid to convince them not to vote down the settlement freeze when the motion is brought to cabinet.

With the cabinet split down the middle, Shas holds the balance of votes Netanyahu needs to approve the U.S. deal. While the prime minister is unlikely to win their support, Shas ministers have said they will abstain in the vote, provided the final agreement specifically excludes East Jerusalem from the freeze.

Israel's previous moratorium on West Bank construction, which ended on September 26, did not include the eastern half of the city, annexed by Israel in 1980 but claimed by the Palestinians as their future capital.

The cabinet has continued to delay a vote on the deal, demanding clarification of the U.S. position on East Jerusalem and whether U.S. Secretary of State Hillary Clinton will demand another freeze as soon as the 90 days are over.

Also Wednesday, U.S. envoy David Hale met with Palestinian officials in the West Bank to discuss the emerging deal. Palestinian negotiator Saeb Erekat said the Palestinians would not have any comment until a deal is officially worked out.