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Netanyahu reprimanded Housing Minister Uri Ariel saying that his ministry's move to issue tenders for potential construction does not contribute to settlement, but actually damages it.
In his conversation instructing Ariel to re-examine the potential construction, the prime minister emphasized that the tenders have no legal or practical significance that creates unnecessary friction with the international community at a time when Israel is trying to recruit it for a better deal on Iran.
Netanyahu also told Ariel that he expects him to coordinate with him on such moves before going ahead. Ariel explained that these are only potential plans and have not reached any formal stage.
When the news of the tenders broke Tuesday evening, Palestinian Authority President Mahmoud Abbas threatened to call off peace talks. He demanded Israel go back on its new settlement plans, and called for an emergency meeting Wednesday in Ramallah to discuss the issue.
A senior Palestinian official told Haaretz that Abbas spoke to Kerry and other members of the Quartet, as well as Arab League Secretary General Nabil al-Arabi.
The official also said there is a growing demand among Palestinian leadership to stop the negotiations and turn to UN bodies, however aides close to Abbas believe he won't make good on the threat without coordinating with the Americans first.
"You must remember that stopping negotiations and the diplomatic process is what the settlers and their representative, Housing Minister Uri Ariel, want most. If we play into their hands, they will have achieved their goals. Netanyahu needs to prove what it is he wants: To reach an agreement or to blow up the process," the senior official said.
The U.S. State Department said it is "deeply concerned" by Israel's announcement over the tenders issued for the construction of some 24,000 new settlement units in the West Bank and that it is demanding explanations from Israel.
State Department spokeswoman Jen Psaki said that Washington was taken by surprise and had no prior knowledge of the plans. "We were surprised by it and we are seeking explanation from the Israeli government. It was not discussed in advance. We don’t recognize the legitimacy of settlements."
National Security Council spokesperson Bernadette Meehan said: “We are deeply concerned by these latest reports that over 24,000 additional units are in the early planning stages. We are currently seeking further explanation from the Government of Israel. Our position on settlements is quite clear: We have always considered the settlements to be illegitimate."
Meehan added: "We have called on both sides to take steps to create a positive atmosphere for the negotiations. We do not consider settlement planning, even in its early stages, to be a step that creates a positive environment for the negotiations.”
Netanyahyu: 'There is no E1. I won't hear of it'
Details on the plans for new settlement construction landed on Cabinet Secretary Avichai Mendelblit's table Tuesday morning, including the plans for 1,200 units in the controversial E1 area between Ma'ale Adumim and Jerusalem.
According to sources close to Netanyahu, Mendelblit went right away to the Prime Minister's Office to update him. "Netanyahu immediately told Mendelblit to tell [Housing Minister] Uri Ariel there is no E1. I won't hear of it."
Mendelblit contacted the housing minister to inform him of the prime minister's demand to halt the planning process for E1, but as of Tuesday evening, the two hadn't spoken directly.
Sources close to Netanyahu said Housing Minister Ariel's move "was irresponsible and thoughtless. Israel is concentrating all its diplomatic efforts on the Iranian issue in order to avoid a bad deal, and suddenly this move comes in and steers all international attention to the issue of settlements."
The broader plan of some 24,000 housing units encompasses several urban areas, as well as the Binyamin Regional Council and Gush Etzion. This is an unusually large number of tenders, unprecedented in the last decade. The tenders are for planning only - some are skeleton plans, some constitute general urban building schemes and others, detailed urban building schemes.