The Israeli government has officially rejected President Barack Obama's demand that it suspends all construction in contested east Jerusalem, aides of Israel's prime minister said today.
The move threatens to entrench a year-old deadlock in Israeli-Palestinian peacemaking.
The aides said Israeli Prime Minister Benjamin Netanyahu delivered his government's position to Mr Obama over the weekend, ahead of the scheduled arrival later today of Mr Obama's Middle-East envoy, George Mitchell.
Washington had put Mr Mitchell's shuttle diplomacy on hold as it awaited a reply from Israel, and aides to Mr Netanyahu provided no information on whether the Israeli leader had offered any other concessions to the Palestinians in an effort to restart the long-stalled talks.
The aides spoke on condition of anonymity because the contact between the two leaders was private.
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