Israel could be making a concession aimed at breaking the deadlock in the Middle East peace process.
Officials in the Jerusalem Municipality say Prime Minister Benjamin Netanyahu has quietly frozen new Israeli construction in the disputed eastern half of the city.
No new building projects have been approved in seven weeks, since Israel angered the United States by announcing plans to expand a Jewish neighborhood in East Jerusalem. The announcement scuttled an agreement for new Israeli-Palestinian peace talks and sparked a deep crisis in U.S.-Israel relations.
The United States backs the Palestinian demand that East Jerusalem should be the capital of a future Palestinian state. But Israel sees East Jerusalem as part of its capital and Mr. Netanyahu has said Israel will not stop building there.
Publicly, Mr. Netanyahu must appease his coalition partners who oppose any curbs on construction in Jerusalem. But privately, he is trying to mend fences with Washington and pull the Palestinians back to the negotiating table.
Israeli analyst Ra'anan Gissin says the prime minister has no choice, but to make concessions through quiet diplomacy.
"Benjamin Netanyahu faces a very tough moment," said Gissin. "I mean he is learning the hard way what many other prime ministers in about 30 years have understood, that you first have to negotiate and strike a deal with the United States before you can even start any contacts with the Palestinian or with the Arab side."
The Palestinian response appears positive. In an interview on Israeli television, Palestinian President Mahmoud Abbas said he is ready to start indirect peace talks.
Mr. Abbas said he will meet with Arab League representatives this Saturday to seek approval for resuming negotiations, and he said he hopes to get a green light.
So there is cautious optimism on both sides that peace talks will resume next month after a 16-month stalemate.