In a subtle overture to the US, Prime Minister Benjamin Netanyahu, Defense Minister Ehud Barak and Housing Minister Ariel Atias agreed upon a de facto moratorium on new building in the settlements.

According to the estimates of officials involved, the freeze will be in effect until the beginning of 2010. The objective is to provide an opportunity for a Mideast peace process to gain momentum in hopes that the new "waiting" tactic will allow international recognition of Israel's sovereignty in Jerusalem and the large settlement blocs.

Despite pressure from right-wing ministers, the housing minister has yet to issue one building tender in the settlements, including in the large settlement blocs, since Netanyahu has taken office. This has been confirmed by Prime Minister Netanyahu's office. The ministry also did not issue new tenders in the final days of Olmert's administration. The right-wing and the haredi sector have expressed their disappointment over this quiet policy.

Right-wing ministers claim that this policy has been forced upon Israel and undermines the country's sovereignty in areas over which there should not be any dispute.

Habayit Hayehudi Chairman Daniel Hershkowitz attacked the settlement freeze policy: "The State of Israel is not a satellite of the US. We have a strategic alliance and close friendly relations with the Americans, but it is a two-way alliance. They need us, too, and we must stand our ground, even more so since the Palestinians show their true face anew each and every time proving that theirs is not a face of peace. As long as this remains the situation in the Middle East, the Americans must halt their pressure on the settlement and not prevent natural growth just as we do not get involved in building in Arizona. The natural growth in Judea and Samaria and the building in the settlement blocs and Jerusalem are a red line that must not be crossed."

The ultra-Orthodox sector, which also suffers from a severe housing shortage, also raised claims against the Shas housing minister. According to them, the sector is currently in need of 20,000 housing units, and building in towns such as Beitar Illit could solve the problem, even if only partially.

Atias suggested that Netanyahu and Barak present the "waiting" tactic to special US Mideast envoy George Mitchell and President Barack Obama as proof of Israel's willingness to advance the peace process.

Barak: We'll continue with current policy

The housing minister, who believes Israel should work towards easing tensions with the US, has withstood pressure from his rightist colleagues in the cabinet, who are protesting the fact that no new tenders have been issued for building projects outside Jerusalem and in the settlement blocs.

Atias told the ministers that this gesture would pave the way for the US and the international community to recognize Israel's sovereignty over Jerusalem and the large settlement blocs. He said the Obama administration should be given ample time to urge the Arab states to make gestures of their own regarding the normalization of ties with Jerusalem as part of the efforts to reignite the peace process.

According to the Shas minister, continued construction in Jerusalem and the settlement blocs that will remain in Israel's possession in a peace deal will be made possible only in the framework of a US-backed permanent agreement.

On Monday, Netanyahu is scheduled to begin his short European tour, during which he is expected to meet with Mitchell.

Barak has called for a 3 to 6 month settlement freeze, while Mitchell is demanding Israel halt settlement construction for a period of a year and upwards.

"We must make it clear to the Americans that this situation, in which we are being criticized by the US despite the fact that we are freezing settlement construction, will not go on forever," one Israeli minister told Ynet.

"We'll tell the Americans that we are not freezing construction, but rather putting it on hold in order to give the process a chance," he said.

Barak's office, which is in charge of all construction in the West Bank, said, "As long as there is no consistent, agreed upon new policy, we will continue to enforce the current one, meaning the removal of illegal outposts."