"There is no agreement that we will reach an agreement on borders within 90 days. There is no such demand and no such commitment," Netanyahu's office quoted him as telling members of his hardline Likud party.

Netanyahu was seeking to calm mounting opposition within his own party to the fresh three-month ban on West Bank settlement building on a day when thousands of settlers gathered in Jerusalem to protest the move.

The deal with Washington, which has not been finalised, would see Israel granted a package of security and diplomatic incentives in return for implementing a new partial halt to building in the occupied West Bank.

Many commentators believe the three-month freeze is designed to allow the Palestinians to return to peace talks that would specifically focus on the borders of a future Palestinian state.

Israel aims to continue construction in large settlement blocs that would become part of the Jewish state after expected territorial swaps under any peace settlement.

But Netanyahu said a resumption of talks would focus on all final-status issues.

"There will not be separate talks on borders but on all the core issues. We intend to enter serious discussions on all issues," he said, according to the statement.

But his apparent willingness to enter a new moratorium has enraged settlers and their supporters.

Sunday's demonstration, which drew mostly teenage settlers, was timed to coincide with Israel's weekly cabinet meeting.

A sea of banners and placards urged ministers to "Vote against," while others addressed Netanyahu, saying: "Yes you can! Say 'No,'" in a twist on US President Barack Obama's successful 2008 election campaign slogan.

"Renewal of the freeze is the start of the uprooting," said another, alluding to fears that a peace deal with the Palestinians will see the removal of Jewish settlements.

Scores of schools in settlements across the West Bank observed a one-day protest strike on Sunday, freeing up thousands of students to attend the demonstration against the potential new moratorium.

Organisers said several thousand demonstrators had showed up, while police spokesman Mickey Rosenfeld told AFP the number was "more than 5,000."

Later on Sunday, several dozen protesters blocked the main road into Jerusalem, sitting on the ground and causing huge tailbacks, an AFP correspondent said.

However, a resumption of negotiations does not appear imminent.

The deal with the Americans was worked out in talks with US Secretary of State Hillary Clinton earlier this month, but has not yet been finalised with Israel demanding the agreements in writing.

Washington has said it is willing to put the understandings in writing, but their failure to produce a document after more than two weeks indicates that disagreements remain.

"We have still not yet received the written understandings from the Americans," Netanyahu told party members who largely oppose the new moratorium.

"If we get a written commitment, I will bring it to the cabinet and I'm sure the ministers will approve it because it is what's good for Israel," the prime minister said.

Another hitch was the insistence by the Palestinians that the new freeze on settlements include annexed east Jerusalem, which the previous moratorium did not and which Israel has refused to do.

"If it does not encompass Jerusalem -- in other words, if there is not a complete freeze on settlement in all the Palestinian territories including Jerusalem -- we will not accept it," Palestinian president Mahmud Abbas told reporters in Cairo after meeting Egyptian President Hosni Mubarak on Sunday.

US-sponsored direct peace negotiations resumed on September 2 but collapsed three weeks later with the expiry of a 10-month Israeli partial ban on West Bank settlement building.

The Palestinians have refused to rejoin the peace talks until a new moratorium is imposed.

earlier related report
Young settlers in Jerusalem mass protest against new freeze
Jerusalem (AFP) Nov 21, 2010 - Thousands of young Jewish settlers on Sunday held a mass demonstration outside Israeli Prime Minister Benjamin Netanyahu's offices in Jerusalem in protest at plans for a new ban on settlement building.

Israel is mulling plans for a fresh 90-day ban on West Bank settlement building in return for a generous US package of political and military benefits, in a proposal which has enraged settlers and their supporters.

Sunday's demonstration, which drew mostly teenage settlers, was timed to coincide with the weekly cabinet meeting, after which Netanyahu was expected to brief MPs from his rightwing Likud party about details of the US offer.

Organisers said several thousand demonstrators had showed up, while police spokesman Mickey Rosenfeld told AFP the number was "more than 5,000."

A sea of banners and placards urged ministers to "Vote against," while others addressed Netanyahu, saying: "Yes you can! Say 'No,'" in a twist on US President Barack Obama's successful 2008 election campaign slogan.

"Renewal of the freeze is the start of the uprooting," said another, alluding to fears that a peace deal with the Palestinians will see the removal of Jewish settlements.

Scores of schools in settlements across the West Bank were observing a one-day protest strike on Sunday, freeing up thousands of students to attend the demonstration against the potential new moratorium.

Addressing the crowds from a stage outside Netanyahu's office, Danny Dayan, head of the Yesha Council of settlers, urged the Israeli leader to return to his nationalist roots and reject any new freeze.

"From this stage, we are saying to the prime minister: come back into the national camp, we want you here!" Dayan said to cheers of approval.

After the cabinet meeting, National Infrastructure Minister Uzi Landau, a hardliner who has vowed to fight any new freeze, headed straight for the podium to tell demonstrators that Israel "would not return to the 1967 borders."

Following the morning demonstration, several dozen protesters blocked the main road into Jerusalem, sitting on the ground and causing huge tailbacks, an AFP correspondent said.

Angry drivers faced off with the students who refused to move until the police arrived and dragged them out of the road, arresting two people.

Netanyahu is currently working to secure a firm majority within his 15-member security cabinet to push through a new moratorium, but is awaiting a written US document outlining terms of the deal before putting it to a vote.

The one-off freeze would halt new building in the West Bank but not in annexed east Jerusalem, which the Palestinians want as the capital of a future state.

But Palestinian president Mahmud Abbas on Sunday said he would not return to the negotiating table unless the freeze included east Jerusalem.

"If it does not encompass Jerusalem -- in other words, if there is not a complete freeze on settlement in all the Palestinian territories including Jerusalem -- we will not accept it," he reporters in Cairo after talks with Egyptian President Hosni Mubarak.

Direct peace negotiations resumed on September 2 but collapsed three weeks later with the expiry of a 10-month Israeli ban on West Bank settlement building.

The Palestinians have refused to rejoin the talks until a new moratorium is imposed.

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