Israel's prime minister pressed his Cabinet Sunday to accept a package of security and diplomatic incentives the U.S. has proposed to entice Israel to renew limits on settlement construction and revive moribund peace talks with the Palestinians, an official said.

The proposed 90-day moratorium could give both sides time to work out an agreement on the future borders of Israel and a Palestinian state, making it clear where Israel can continue to build and where it cannot.

The proposal was worked out during a marathon meeting last week in New York between Israeli Prime Minister Benjamin Netanyahu and U.S. Secretary of State Hillary Clinton.

Netanyahu told his Cabinet that details were still being finalized by Israeli and U.S. teams and that when the proposal is complete, he would bring it before an inner Cabinet of decision-makers.

"Every proposal will consider the security needs of the state of Israel, both immediate needs and threats in the coming decade," he said.

While Netanyahu did not explicitly come out in support of the plan, one Cabinet minister from Netanyahu's Likud Party, Yuli Edelstein, said it was clear the prime minister backs it.

"He was definitely supportive and spoke about the positive side of this offer," said Edelstein, who attended the meeting. He noted the prime minister stressed the security gains that Israel would make from the deal.

Among the key components would be Israeli access to top-end warplanes and U.S. diplomatic protection at the United Nations.

A vote in Israel's Security Cabinet, a smaller group of senior Cabinet ministers and security chiefs, is expected on Wednesday. Edelstein and other officials said the vote is expected to be close, since many members of the hard-line coalition oppose any settlement freeze.

The Palestinians were unhappy because the proposed construction curbs would apply only to the West Bank, not east Jerusalem, their hoped-for capital. Still, they did not reject the proposal outright, saying they would consult among themselves and with Arab leaders.

Palestinian negotiator Saeb Erekat said the Americans had not officially relayed details about the proposal to the Palestinians, but "they know we have a major problem in not including east Jerusalem."

He said Palestinian President Mahmoud Abbas would put the U.S. plan before Palestinian decision-makers and call for an immediate session of Arab League officials before announcing an official decision.

However, both the Israelis and the Palestinians would be hard-pressed to turn down President Barack Obama as he seeks to realize a major foreign policy goal: Resolution of the Israeli-Palestinian conflict, with all that implies for easing tensions in the wider Mideast.

Peace talks ground to a halt in late September, just three weeks after they began at the White House, after Israel resisted U.S. and Palestinian pressure to extend a 10-month moratorium on new construction in the West Bank.

The Palestinians refused to return to the negotiating table if construction resumed on land they want for a future state and gave the U.S. until later this month to come up with a formula to salvage the talks.

The diplomatic climate soured even further last week after Israel pressed ahead with plans to build 1,300 apartments in east Jerusalem.

Last week, Netanyahu met with U.S. officials in an effort to break the impasse and held a seven-hour meeting with Clinton. He returned with a U.S. proposal to renew the moratorium in exchange for a White House pledge to ask Congress to sell Israel 20 stealth fighter jets for $3 billion, Edelstein, the Cabinet minister, told The Associated Press.

Washington also pledged to use its veto to quash attempts to hurt Israel at the United Nations over the coming year and to reach a strategic security agreement with Israel as part of a final peace deal, Edelstein said.

The Palestinians have said that if negotiations fail they will consider sidestepping Israel and seek U.N. recognition of a Palestinian state. Israel is also worried by efforts at the U.N. to force it to expose its secret nuclear program and to censure it for a deadly raid in May on a Turkish ship that tried to break Israel's naval blockade of the Hamas-run Gaza Strip.

Under the proposal, the U.S. would agree not to seek a further extension of the building moratorium after it expires. If a border agreement is reached within that time, the whole settlement construction issue ceases to be a problem. U.S. officials have repeatedly said they would like to resolve the border issue first.

The likelihood of achieving that goal is far from assured.

The Palestinians want to establish a state in east Jerusalem, the West Bank and the Gaza Strip, all captured by Israel in the 1967 Mideast war. Israel has withdrawn from Gaza, but about half a million Israelis have settled in the other areas, and Netanyahu has made clear he wants to retain parts of the West Bank and east Jerusalem.

There are signs the Palestinians will agree to land swaps enabling settlements very close to the Israeli border to become a part of the Jewish state. But previous rounds of negotiations under more dovish leaders failed to nail down a border agreement, and Palestinians said Netanyahu resisted a discussion of borders in the September talks.

"If we freeze (construction) for three months, the pressure on us to decide our permanent borders will be unbearable," said Cabinet minister Silvan Shalom, who is a member of Netanyahu's ruling party and the decision-making inner Cabinet. "Unfortunately, if that happens, it will be a huge mistake," he told Israel Radio.

Army Radio reported that a small religious party, The Jewish Home, sent a letter to Netanyahu threatening to quit his coalition if the limits on construction are renewed. The party has three of parliament's 120 seats.

Another Palestinian negotiator said the U.S. proposal as reported did not demand enough of Israel.

"The United States should have said, 'We will negotiate to reach an agreement on borders, and settlements should be frozen during that time," said Nabil Shaath. "We hope that it will be done in three months, we presume it will be done in three months, and if not, the settlement freeze will continue until we reach an agreement.'"

According to Israeli lawmaker Danny Danon, a member of Netanyahu's Likud Party, the building freeze would apply to all new construction that began in the West Bank after the moratorium expired on Sept. 26. Anti-settlement watchdog Peace Now reported Sunday that construction has begun on 1,649 apartments.

Settler leader Dani Dayan denied that so much construction had taken place, saying Peace Now's numbers were "far from the truth." But he didn't offer different figures.

Danon said the extended moratorium would not apply to some 3,000 apartments whose construction was already under way when the original limits were imposed a year ago and continued throughout.


Associated Press writers Daniel Estrin and Diaa Hadid contributed to this report.