The Israeli daily Yedioth Ahronoth said President Barack Obama's envoy George Mitchell had asked an aide to Prime Minister Netanyahu, at a meeting in London on Monday, to block planned approvals for new building at Gilo, a Jewish settlement on land Israel captured in 1967 and annexed to its Jerusalem municipality.
Israeli government spokesman Mark Regev declined comment on the report, which also said Netanyahu's negotiator had rejected Mitchell's request. Regev repeated Israel's refusal to include areas it annexed to Jerusalem as part of any accommodation of Obama's calls for "restraint" in West Bank settlement growth:
"Prime Minister Netanyahu, in order to get the peace process back on track, is willing to adopt the policy of the greatest possible restraint concerning growth in the West Bank -- but this applies to the West Bank," Regev said , Reuters report.
It was also reported, Israeli Prime Minister Benjamin Netanyahu voiced concern on Tuesday over a mutiny by pro-settler soldiers that raised fears of more rebellion in the ranks in any future land-for-peace moves with the Palestinians.
"Our security and existence depend on the Israel Defence Forces," Netanyahu told reporters. "If you promote disobedience, you will bring about the downfall of the state. There is no place for disobedience."
In an incident on Monday played down by the military as an aberration and described by some political commentators as a crossing of a red line, a handful of soldiers protested against the partial dismantling of a settler-outpost in the West Bank.
Their action prompted 15 right-wing legislators in the 120-member parliament to propose a bill that would bar the military from forcing troops to remove Jews from settlements in the occupied territory.
Two of the soldiers disobeyed orders and refused to secure the settlement site, which had been built without government permission and where police razed two buildings. They were sentenced respectively to 20 days and 14 days in jail, Reuters report.
Meanwhile, Egypt's President, Hosni Mubarak, has called on Palestinian leader Mahmoud Abbas to stay in post and seek re-election in polls due next year.
Mr Mubarak urged him to "proceed with the national march in view of the Palestinians' dire need for his role" at talks in Cairo, a spokesman said.
The impasse in peace talks prompted Mr Abbas to decide not to run again.
The two leaders also discussed an Arab League plan to have seek UN recognition of an independent Palestinian state, BBC News report.