Reports Thursday morning said that Prime Minister Binyamin Netanyahu has rejected demands by U.S. President Barack Obama's demand that Israel stop building in most of the city. The report in the Wall Street Journal Thursday said that Israel had instead agreed to undertake “gestures” to the Palestinian Authority, such as releasing terrorists and smugglers, and to ease passage of goods and people between Israel and PA-controlled areas.
The report says that Israel had also agreed to discuss expanding the responsibilities of PA security officials, and to discuss the future of Jerusalem in permanent status talks. However, Israel would continue to build in all parts of the city, as previous governments did, the report quotes Netanyahu's response as saying.