Diplomatic spat: Benjamin Netanyahu meets with U.S. Vice President Joe Biden last month after Barack Obama refused to be photographed with the Israeli Prime Minister
Halted: Israel is thought to has suspended plans to build more Jewish homes on land such as The compound known as the Shepherd's Hotel in East Jerusalem
Israel has quietly halted construction of controversial settlements in East Jerusalem at the behest of America, it has been claimed.
Settlement building in the contested Israeli capital caused a diplomatic spat last month when plans for new erections were unveiled during a trip to the country by US Vice President Joe Biden.
The announcement caused a fall-out between the two countries and led President Obama to 'snub' Israeli Prime Minister Benjamin Netanyahu on a return visit to Washington.
Mr Netanyahu struggled to defend himself during the furore but insisted that the settlement construction plans would not be stopped by America's outraged response.
However, a leading member on the city's council said a 'de facto' freeze was now in effect.
Meir Margalit, an opposition member of the Jerusalem City Council, said: 'The government ordered the Interior Ministry immediately after the Biden incident to not even talk about new construction for Jewish homes in east Jerusalem.
'It's not just that building has stopped: The committees that deal with this are not even meeting anymore.'
I know there are several projects of Jewish buildings in East Jerusalem and the committee told them wait for better timing. De facto, not one project of settlers in East Jerusalem has been approved or come for approval to the committee,' he said.
Mr Netanyahu and Nir Barkat, the Mayor of Jerusalem, denied that construction had been put on hold.
The Prime Minister has repeatedly vowed that Jerusalem will remain 'the eternal undivided capital of the Jewish people under Israeli sovereignty' and says President Obama is interfering in a domestic planning issue.
He said a freeze singling out housing for Israelis in East Jerusalem would be against Israeli law.
'It’s illegal in the United States, it’s illegal in Europe and it’s illegal in Israel. Therefore, it’s a straight no.
'The same rules for Jews and Arabs apply in all the city of Jerusalem. It’s a free market. They can buy and sell as long as they obey the law,' he said.
Mayor Nir Barkat said that he was pushing ahead with a master plan to increase the population of Jerusalem, both Israeli and Arab, from its current 800,000 to a million in the next 20 years.
He said he had not been asked to freeze any plans for Jewish housing in East Jerusalem and, if asked, he would refuse to do so.
East Jerusalem was captured by Israel in the 1967 Six Day War but is seen by Palestinians as the capital of their future state.
It is now home to about 250,000 Palestinians and some 300,000 Israelis.
Palestinians are insisting on a complete freeze on Israeli development across the pre-1967 border before they will agree to indirect peace talks brokered by the United States.
It became a major issue when plans for a new housing development in Ramat Shlomo, an ultra-orthodox area in what used to be no man’s land, was announced in the middle of Vice-President Biden's trip in March.
An engineer who oversees residential construction in a Jewish neighborhood in east Jerusalem said requests for proposals to build hundreds of apartments haven't gone out.
'I think it's related to the political situation,' he said, adding that he knew of no official order to block construction.
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