Reacting to Israel's rejection on freezing Jewish settlement activities in East Jerusalem, the United States said Thursday that the tough stance held by the Netanyahu-led government "is not sustainable."

"The Israelis have a long-standing position. But ... the status quo is not sustainable. We've had a variety of conversations on these issues and specific steps ... We think that they have to take," said State Department spokesman Philip Crowley.

In an interview with Israel TV Channel 2 on Thursday, Prime Minister Benjamin Netanyahu said that Israel does not intend to comply with the Obama administration's demand to freeze settlement construction in East Jerusalem.

"There will be no freeze in Jerusalem, ... There should be no preconditions to talks," said the prime minister, referring to Palestinian National Authority's demand that Israel must halt all settlement activities before they would agree to resume direct peace talks.

The Obama administration has been exerting efforts to pressure on the Israeli government and the PNA to resume the stalled peace talks, so that the two sides could reach a permanent peace agreement that leads to secure Jewish state living side by side in peace and security with a viable and independent Palestinian state.

PNA Chairman Mahmoud Abbas insists that the talks shall not resume until the Israeli government fully freezes the Jewish settlement construction, while the Israeli side vows to ensure the "natural growth" of the Jewish settlements.

"Have they done everything that we'd like to see them do? No!" said Crowley.

At least 450,000 Israelis live in more than 100 settlements in the West Bank, including East Jerusalem.

After Israel's announcement early in March to build 1,600 homes in the neighborhood of Ramat Shlomo in East Jerusalem, the PNA decided to suspend the indirect talks with Israel, which was brokered by U.S. special envoy George Mitchell following tough shuttle mediation between Israel and the Palestinians.

"We're trying to get the parties engaged, as a first step, indirectly, and as a second step, directly, so that we can address issues of housing, refugees, borders, security, Jerusalem, all of these issues," said Crowley.

"We recognize that there are things that happened on the ground that can impede the ability to get to that direct negotiation. .. We're trying to remove obstacles to a direct negotiation," said the spokesman.

Envoy Mitchell is expected to arrive in Israel late on Thursday for a new round of mediation between Israel and the Palestinians over resuming peace talks.