The U.S. administration officially announced yesterday the start of proximity talks between Israel and the Palestinian Authority, with both sides promising to make moves toward peace.

The American announcement stated that Palestinian Authority President Mahmoud Abbas committed to countering incitement against Israel and that Prime Minister Benjamin Netanyahu said there will be no construction in the neighborhood of Ramat Shlomo in East Jerusalem during the next two years.

Israel also pledged to undertake a series of confidence-building measures toward the PA. A diplomatic source in Jerusalem said the gestures will most likely include the release of hundreds of Palestinian prisoners, the removal of additional checkpoints in the West Bank, a de-escalation of Israeli military activity in Palestinian towns, and the transfer of security control over areas of the West Bank to the PA. The source added that these steps will be carried out in the coming weeks.

Both sides received different assurances by the administration with regards to the proximity talks, and they in turn committed to avoiding any provocations, as well as undertaking confidence building measures.

The Obama administration refused to give details on the sorts of assurances it had given or what promises it had received in return.

"They are both trying to move forward in difficult circumstances, and we commend them for that," State Department spokesman Philip Crowley said.

According to the administration, the visit of Special Envoy George Mitchell to Israel and the Palestinian Authority in recent days was essentially the first round of the proximity talks.

Crowley said that Mitchell was due back in the region for another round of talks next week.

In its announcement the administration said that it was clear to both sides that if steps are taken during the talks that undermine trust, Washington would respond and blame those at fault, in a bid to get negotiations back on track.

Moreover, the United States made clear in its announcement that the aim of the talks is to eventually move on to direct negotiations.

Sources close to Netanyahu confirmed that a planned Ramat Shlomo development will not be built in the coming two years. They stressed that the announcement of construction plans during the visit of U.S. Vice President Joe Biden involved a project was in the initial planning phase.

"Prime Minister Netanyahu announced this publicly following the Biden visit," a source close to Netanyahu said. "Moreover, the prime minister made it clear throughout that construction and planning in Jerusalem will continue normally, precisely as they have been under all Israeli governments in the past 43 years, and we will not make any [other] Israeli promises on this matter."

Regarding the assurances received from the Americans, the sources said that the U.S. promised that the resolution of the core issues, and especially the most sensitive issues, like Jerusalem, will be raised only when the talks move to a direct format.

"Netanyahu agreed to begin discussing certain substantive issues in the proximity talks," the sources said. With regards to gestures of good will, the source said that "none of these is linked to the policy of planning and construction in Jerusalem."