(IsraelNN.com) U.S. Middle East envoy George Mitchell reportedly asked Prime Minister Binyamin Netanyahu, during one of their recent meetings, to freeze a construction project of dozens of housing units in Gilo. Netanyahu turned him down.

Gilo, one of Jerusalem’s largest neighborhoods with 33,000 people, was founded in 1971 on land in southern Jerusalem that was liberated in the Six Day War. Mitchell reportedly said that the construction risks raising tensions with the Palestinian Authority.

Netanyahu refused the U.S. request, explaining that the construction in Gilo, as in most places of the world, does not require government approval. He also explained that the neighborhood is “an integral part of Jerusalem.”

A government official said that Netanyahu “is ready to show the maximum restraint when it comes to construction in Judea and Samaria to help restart negotiations, but this policy does not apply in Jerusalem, our capital.”

U.S. Secretary of State Hillary Clinton has also asked for a construction halt in Jerusalem areas liberated in 1967 – but she has also acknowledged that the negotiating process has never before been made contingent upon a construction freeze in Judea, Samaria and Jerusalem.