The step would delay a pull-back for many months and was immediately denounced by the Palestinians as a new stalling tactic.
Benjamin Netanyahu, the Israeli Prime Minister, has not yet decided whether to hold a referendum, which would be the first held in Israel and would require changes in the nation's basic law.
Israel's left-wing opposition said the country committed itself to the withdrawals in international agreements and that Mr Netanyahu had no right to submit the issue again to a referendum.
The referendum idea also runs counter to appeals by Bill Clinton's administration for Mr Netanyahu to accept quickly a US proposal for an Israeli withdrawal from 13 per cent of the West Bank.
The pull-back plan was proposed in January and has been accepted by the Palestinians. Since then Mr Netanyahu has ignored informal deadlines set by Madeleine Albright, US Secretary of State.
Ties between Israel and the US were further strained last week when the Israeli cabinet approved a plan for the expansion of Jerusalem.
Under the peace accords, the status of Jerusalem is to be determined in negotiations with the Palestinians, and both sides pledged not to make changes on the ground in the meantime. The US called Israel's expansion plan "provocative."
Confusion remained yesterday over what exactly had been approved by the cabinet with regards to Jerusalem.
It was thought that the cabinet had decided on territorial expansion, but had not specified whether the city boundaries would be extended into Israel proper, the West Bank or into both, newspapers said.
Ezer Weizman, the Israeli President, also complained that he was misled by the Prime Minister.
Mr Weizman was quoted as saying Netanyahu had given him reason to believe that a West Bank withdrawal would be carried out, but that this was no longer the case.
Recent surveys indicate that about two-thirds of the Israeli public supports the US proposal for the Israelis pulling back from 13 per cent of the West Bank.
In another provocation to West bank Palestinians, Jewish settlers yesterday took possession of a home in Jerusalem's Arab neighbourhood of Silwan, just outside the walled Old City.
The settlement movement Elad said that it had bought the home, and that it planned to move into four others in the area in the next few days.Reuse content