Under mounting international pressure, Israeli Prime Minister Benjamin Netanyahu has halted plans to build 20,000 new settler homes in the occupied West Bank.
The Netanyahu directive late Tuesday froze plans for housing construction in a particularly sensitive area outside Jerusalem known as E1. The reversal came just hours after Palestinian leaders threatened to walk out of Middle East peace talks brokered by the United States if the construction plan moved forward.
In a statement, Netanyahu said the plan had caused "unnecessary conflict" with the international community at a time when his government is seeking to rally pressure against Iran in ongoing nuclear talks.
More than one-half million Israeli settlers now live in the West Bank and East Jerusalem - territories captured by Israel in the 1967 war that Palestinians envision as part of a future independent state. The international community rejects those settlements as illegal.
Israeli forces withdrew from the Gaza Strip in 2005.