US President Barack Obama aims to halt construction completely in east Jerusalem, including the strictly Orthodox neighbourhood of Ramat Shlomo, as part of 10 demands made during his Washington meeting with Israeli Prime Minister Binyamin Netanyahu, Israel media has reported.
Other demands include ending the demolition of Palestinian neighbourhoods and the re-starting of indirect talks with the Palestinians to decide on future borders.
But Israelis fear that indirect talks would give the American mediators an advantage in influencing the discussion, as it could mean direct talks are bypassed entirely.
Palestinian President Mahmoud Abbas has refused to conduct indirect talks until there is a building freeze in east Jerusalem.
Mr Netanyahu has recently spoken out against accusations in the Israeli press that he was badly treated during his visit to Washington — where he and the president held neither the usual photo call nor a press conference.
He told a cabinet meeting on Sunday: "I have recently heard anonymous, unworthy remarks in the media, regarding the American administration and the American president. I would like to make it clear: I find these remarks to be unacceptable.
“They are from nobody acting on my behalf. Relations between Israel and the US are those between allies and friends, and reflect longstanding tradition. Even when there are differences of opinion, they are differences of opinion among friends, and will remain so."
Mr Obama’s adviser David Axelrod echoed Mr Netanyahu’s sentiments.
He told CNN: “This was not about formalities. This was not about a ceremonial meeting. This was a working meeting.”