Sources in Prime Minister Benjamin Netanyahu's bureau denied Thursday that he is considering another freeze on settlement construction in an effort to jump-start negotiations with the Palestinians.

The sources were responding to a report in Haaretz that quoted National Security Adviser Yaakov Amidror as warning that settlement construction was causing Israel diplomatic damage.

"It's impossible to explain the issue of settlement construction any place in the world," two Israelis quoted Amidror as saying during closed-door discussions in the Prime Minister's Bureau. "It's impossible to explain this matter to German Chancellor Angela Merkel or even to Canadian Prime Minister Stephen Harper. Construction in the settlements has become a diplomatic problem and is causing Israel to lose support even among its friends in the West."

The sources in Netanyahu's bureau didn't deny that Amidror made these remarks, but said they should not be seen as a hint that Netanyahu was considering another settlement freeze. The prime minister's stance on this issue hasn't changed, they said.

Amidror's criticisms were echoed Thursday by outgoing Deputy Prime Minister Dan Meridor.

"There is a discrepancy between our claim that we are willing to accept a two-state solution and the fact that we don't limit the construction in the settlements to the settlement blocs," Meridor told Israel Radio. "A decision to this effect should be made, otherwise our claim and our willingness is in doubt and this extracts a very high price from us.

"I'm not saying we should stop construction in Jerusalem and in the settlement blocs," added Meridor, a member of Netanyahu's Likud party who did not win re-election to the Knesset last month. "But we must not build beyond them, because by doing so we promote a very dangerous situation to Zionism, of one state from the Mediterranean Sea to the Jordan River, which endangers us more than anything else."

The three main settlement blocs are Ariel, Ma'aleh Adumim and Gush Etzion.

Netanyahu and his advisers have recently concluded that once the new government is formed, Israel will come under heavy international pressure regarding the Palestinian issue, and especially settlement construction.

Netanyahu himself compared the expected pressure to "a meat grinder." The surprise announcement that U.S. President Barack Obama will visit this spring, the plans by new U.S. Secretary of State John Kerry to revive the peace process, and fear of a European peace initiative or international sanctions are all part of this "meat grinder."