The Group of Eight (G8) powers called for a freeze in Jewish settlement construction in the West Bank and urged all parties to "re-enter direct negotiations on all standing issues consistent with the Road Map," according to a final draft statement seen by Reuters on Friday.

The G8 foreign ministers, who are meeting in Trieste, Italy, also deplored the post-electoral violence in Iran.

Following his meeting with Benjamin Netanyahu in Paris on Wednesday, French President Nicolas Sarkozy called on the Israeli prime minister to take "every trust-building step possible" in negotiations with the Palestinians, including a complete halt to construction in settlements.

He also called on Israel to ease Palestinian movement restrictions in the West Bank.

The tensions between Jerusalem and Washington over the settlement issue have yet to be resolved. The Americans will not accept anything but a complete freeze of all construction in the West Bank, including the neighborhoods adjacent to Jerusalem itself. Israel however says that the understanding with the previous administration allowed for the building of new housing units within the boundaries of existing settlements.

It is with these tensions in the air that the meeting between Netanyahu and George Mitchell, President Barack Obama's special envoy to the Middle East, was canceled. Defense Minister Ehud Barak is to leave for Washington next week in an attempt to bridge the gaps with Mitchell.

Netanyahu has said on a number of occasions that he agrees that no new settlements would be built, but that he cannot tell families in the existing ones "not to have children."

Elliot Abrams, a senior advisor to the Bush administration, wrote in the Wall Street Journal on that "despite fervent denials by Obama administration officials, there were indeed agreements between Israel and the United States regarding the growth of Israeli settlements on the West Bank."

The editorial validates the Israeli government's claim that then-Prime Minister Ariel Sharon and President George W. Bush came to an agreement that would allow for some degree of growth within existing settlements.