Israel rebuffed a strong plea today from its close ally the United States to stop all building in Jewish settlements in the occupied West Bank.
The US President Barack Obama, who hopes to revive Middle East peace negotiations, was to meet Palestinian President Mahmoud Abbas later in the day, when Abbas is expected to ask that Washington put new pressure on Israel to stop backing settlers.
Obama's secretary of state, Hillary Clinton, offered strong US support on Wednesday for the Palestinian demand. She said Obama would "press the point" that all settlement activity must stop, including the "natural growth" of existing enclaves which Israeli Prime Minister Benjamin Netanyahu says he will continue.
Responding to her comments, Israeli government spokesman Mark Regev reaffirmed a commitment to permit some expansion.
"Israel ... will abide by its commitments not to build new settlements and to dismantle unauthorised outposts," he said.
"As to existing settlements, their fate will be determined in final status negotiations between Israel and the Palestinians. In the interim period, normal life must be allowed to continue in these communities."
Wading into Middle East diplomacy early in his presidency, Obama will meet Abbas 10 days after hosting Netanyahu at the White House, where they differed over settlement expansion.
Abbas will make his case for a tougher US approach toward Netanyahu, who has also not endorsed Palestinian statehood.
But it remains unclear how hard Obama is willing to push Israel, a close US ally, to make concessions when his administration has yet to complete its Middle East strategy.
Obama, who has reaffirmed US support for a two-state solution, sees engagement in Palestinian-Israeli peacemaking as crucial to repairing America's image in the Muslim world and drawing moderate Arab states into a united front against Iran.
In Thursday's talks, Obama's objective will be to shore up Abbas, a moderate backed by the West but politically weak with rival Hamas Islamists controlling the Gaza Strip.
On the eve of Abbas's visit, Netanyahu said in Jerusalem that the Palestinians must also be pressed to meet their commitments, including cracking down on militants, under a 2003 peace "road map" each side has accused the other of ignoring.
Palestinians contend that Jewish settlement building is aimed at denying them a viable state.
Abbas's visit could be a preview of what Obama can expect next week when he sees Saudi King Abdullah in Riyadh and Egypt's President Hosni Mubarak in Cairo, where the US president will deliver a much-anticipated speech to the Muslim world.
Muslims will be looking for signs of how Obama intends to tackle the Arab-Israeli standoff. His predecessor George W. Bush was criticized for neglecting the decades-old conflict and most Muslims believed his policies were biased in favour of Israel.
What the White House has made clear is that Obama has no plan to use his June 4 speech in Egypt to unveil a new peace initiative, despite widespread speculation that he will do so.
But Obama has signalled that he hopes to work toward a broader peace between Israel and its Arab neighbours.
For now, the prospects for progress look dim.
In Washington last week, Netanyahu, who heads a new right-leaning government, did not budge from his resistance to accepting a two-state solution, a cornerstone of US policy.
Despite Obama's insistence that settlements "have to be stopped," Netanyahu held firm.
The US-sponsored road map requires Israel to freeze settlement activity. Continued resistance could cause friction in generally smooth tied between Israel and its staunchest ally.
Abbas has ruled out restarting peace talks until Israel commits to Palestinian statehood and a settlement freeze. The White House said it was "hopeful" Abbas would agree to resume negotiations.
Close to half a million Jews live in the West Bank and Arab East Jerusalem, which were captured by Israel in the 1967 Middle East war. The World Court has deemed the settlements illegal.