Israeli Prime Minister Benjamin Netanyahu has rejected an Obama administration call for a total construction freeze in eastern Jerusalem, The Wall Street Journal reported.

Israeli officials conveyed the rejection to White House officials last weekend, the newspaper reported in an article published Thursday.

The Prime Minister’s Office on Thursday confirmed The Wall Street Journal report, which was based on Washington diplomatic sources, Israeli media reported.

Netanyahu did agree, however, to undertake confidence-building measures toward the Palestinians, according to the newspaper. They include allowing the opening of Palestinian Authority institutions in eastern Jerusalem, turning over more West Bank land to Palestinian security control and discussing core issues such as permanent borders and the status of Jerusalem during indirect peace talks instead of waiting for direct negotiations.

The newspaper reported that U.S. officials said the refusal to freeze construction in all of eastern Jerusalem could be a barrier to starting new negotiations with the Palestinians, and that some of the concessions offered by Israel are “nearly identical” to a list that Israel has offered to the White House twice before in recent months but has not implemented.

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