Israel's Ma'ariv daily newspaper reported on Wednesday that Washington had softened its position somewhat on the growth of Jewish communities in Judea and Samaria, and will allow Israel to complete housing projects that were begun before President Barack Obama issued his demand for a full construction freeze.

According to the report, Israel got a green light to complete construction on some 2,500 housing units in communities across the disputed territories, including on the eastern side of Jerusalem.

The report indicated that after those projects are wrapped up, the Obama Administration expects Israel to fully comply with its demands.

Israeli government and US embassy officials refused to comment on the story.