Netanyahu met with members of his Likud Party on Monday and denied any freeze was in place, said Danny Danon, a lawmaker who attended the session.

"If we see there is a freeze, we will not sit quietly and the prime minister knows that," Danon said. "This coalition will not allow the prime minister to freeze building in Jerusalem."

Palestinian negotiator Saeb Erekat said he has not heard anything official about an Israeli construction freeze in east Jerusalem. "What counts for us is what we'll be seeing on the ground," he said.

Still, any de facto freeze could make it easier for the Palestinians to participate in US-mediated peace talks. The Palestinians have refused to hold direct negotiations with Netanyahu unless he halts all settlement construction in the West Bank and east Jerusalem.

Attempts to advance construction haven't stopped altogether: A lower-level municipal committee gave preliminary approval last week to a synagogue and kindergarten in a Jewish neighborhood in east Jerusalem, Turujamen said. The decision still needs Interior Ministry approval.

The freeze does not affect construction that is already under way, or hundreds of apartments where approval has already been granted. However, an engineer who oversees residential construction in a Jewish neighborhood in east Jerusalem said proposals to build hundreds of apartments have been held up in recent weeks. He spoke on condition of anonymity because he did not want to jeopardize his business ties with the city.

Israel captured east Jerusalem, the site of sacred shrines holy to Jews, Muslims and Christians, in the 1967 Middle East war and immediately annexed it. Some 180,000 Israelis now live in Jewish neighborhoods built there in the past four decades, and about 2,000 more live in the heart of traditionally Arab neighborhoods.

The Palestinians, the US and the rest of the international community do not recognize the annexation and regard the neighborhoods as no different from the settlements Israel built in the West Bank.