Excerpt from report in English by privately-owned Israeli daily The Jerusalem Post website on 18 November

[Report by Herb Keinon and Hilary Leila Krieger: No Limits on Gilo Construction, Government Declares"]

Prime Minister Binyamin Netanyahu is willing to show "restraint" in construction in the West Bank, but will not accept any restriction on building in Jerusalem, senior government sources said Tuesday [17 November] night, following the Jerusalem Municipal Planning Committee's approval of a plan to build some 900 units in the capital's southeastern Gilo neighbourhood.

Army Radio reported Tuesday overnight that Netanyahu instructed his government to refrain from making any statements in response to US criticism of the municipal committee's decision. [passage omitted on remarks by foreign leaders]

One senior government official said that Netanyahu was "willing to show the greatest possible restraint concerning building in the territories, and has even received praise for that restraint. But that is in the West Bank. Gilo is in Jerusalem, and that is the capital."

The officials said that while the prime minister has made clear he would accept a temporary moratorium on new housing developments in the West Bank to facilitate the relaunch of negotiations with the Palestinians, he would not place any limitations on building in Jerusalem. [passage omitted covered in previously-filed material]

Knesset Speaker Re'uven Rivlin lashed out on Tuesday against the American demands, saying that "new demands of the type that the Americans are airing now, pushes us towards a red line that we cannot allow ourselves to cross, and is not legitimate. The right to build in all of unified Jerusalem is not questioned in Israel, and this approach, that has directed us for 40 years, has already been coordinated with the international community," Rivlin said during a meeting with Lithuanian Ambassador Darius Degotis.

Rivlin's comments were echoed by former housing minister MK Me'ir Shitrit (Qadima), who was one of the forces behind building projects in the southeast Jerusalem neighbourhood of Har Homa.

"The American demands are misguided, and if Israel accepts them, it could constitute the beginning of a principle that would prohibit Israel from building in west Jerusalem altogether. Jerusalem has not been the capital of Israel since Camp David, but rather since King David," Shitrit told The Jerusalem Post.

Shitrit added that in previous administrations, the Americans had not objected to building throughout east Jerusalem, including in Har Homa, but added that part of America's tolerance for the building may have been due to the fact that, at the time, Israel was involved in active peace negotiations with the Palestinians. "The existing status quo is one in which building is accepted in all of Jerusalem," he said.

Jerusalem Mayor Nir Barqat said that he refused to be part of a halt to Jewish or Arab construction in west or east Jerusalem. "Israeli law does not discriminate between Arabs and Jews, or between east and west of the city," he said in a statement. "The demand to cease construction just for Jews is illegal, also in the US and any other enlightened place in the world."

"It is inconceivable that the US government would demand a construction freeze in the US based on race, religion or sex, and the attempt to demand this from Jerusalem constitutes a double standard and is unacceptable," continued the statement. "The Jerusalem Municipality will continue to enable construction in every part of the city for Jews and Arabs alike."