The US State Department announced on Sunday that Israel had agreed to freeze construction in the eastern Jerusalem neighborhood of Ramat Shlomo for two years as a goodwill gesture to the Palestinians.
State Department Spokesman Philip Crowley said the Israeli commitment was made during a meeting with US envoy George Mitchell that wrapped up the first round of indirect US-brokered peace negotiations.
The Ramat Shlomo building project was at the center of the recent rift in US-Israel relations after mid-level approval for the construction was announced during a visit by US Vice President Joe Biden. Washington called the move an "insult" considering that the US has supported the Palestinians' claim to Jerusalem as their future capital.
The Palestinians and the Americans at the time demanded that Israel officially halt the Ramat Shlomo project, to which Israeli Prime Minister Benjamin Netanyahu responded that Israel has the right to build anywhere in its ancient capital.
Despite Netanyahu's public defiance, municipal officials noted that it become nearly impossible to approve new building permits in the wake of the incident, and that an unofficial building freeze had taken hold. If accurate, Sunday's announcement marked the beginning of an official Jewish building freeze in eastern Jerusalem.