A Palestinian woman holds a banner reading "No to occupation" in front Israeli border policemen during a protest near a disputed house in the neighborhood of Sheikh Jarrah in east Jerusalem. Maya Hitij / APIsrael insists that it has no intention of heeding the Obama Administration's demand that it halt construction in East Jerusalem. "Jerusalem will grow," Jerusalem Mayor Nir Barkat tells TIME. "With the American administration, without the American administration." Barkat insisted that he has not been asked to freeze any plans for building new Israeli housing in East Jerusalem, and also that he would refuse to do so. That's the same message Prime Minister Benjamin Netanyahu continues to reiterate. But there are plenty of indications that a de facto freeze may already be in effect on the ground.
Take Plan number 12705 for the new Shimon HaTzadik neighborhood in Sheikh Jarrah in East Jerusalem, which would demolish 40 low-rise Palestinian homes built in traditional local stone to make way for modern apartment blocks up to 18 stories high, containing 200 residential units for Israelis. There have been weekly demonstrations at the site since the landowners, Nahalat Shimon International, began evicting the Palestinians who had been living in the area when it was captured by Israeli forces in the war of 1967. Despite U.S. demands that Israel halt construction on territory occupied in 1967 in order to restart peace talks, Shimon HaTzadik Plan 12705 was approved by the Jerusalem District Planning Committee of the Israeli Ministry of the Interior on March 2, and forwarded to the Jerusalem Municipality Planning Committee. (See pictures of Jerusalem, a divided city.)
But while nobody's admitting that Plan 12705 is under some sort of political freeze, it appears to have been stalled by bureaucratic inertia. The Jerusalem Municipality Planning Committee has met several times since March 2, but Plan 12705 hasn't been on its agenda. Likewise with other plans for residential development in East Jerusalem. Over at the Interior Ministry, the District Planning Committee has not convened since the visit to Israel by Vice President Joe Biden, during which Israel-U.S. ties were plunged into a crisis by the announcement of a plan to build 1,600 new housing units on occupied land. Meir Margalit, an opposition member of the Jerusalem City Council, tells TIME that an unofficial freeze is already in effect, despite the official denials.
"Since Vice-President Biden was here, they refuse even to bring to the committee projects for Jewish buildings in East Jerusalem," says Margalit. (See pictures of Palestinian 'Day of Rage.')
"The committee told them wait for better timing. De-facto, not one project of settlers in East Jerusalem has been approved or come for approval to the committee," he says. "Just to give the possibility to start negotiations, the government and municipality must stop building. It's very important to do it because peace is more important than houses."
Margalit says a major religious housing project slated for the north of the city neighboring Ramallah, was recently canceled after U.S. intervention.
"What's going on? Actually, we don't know exactly," says Yakir Segev, another councilor and close ally of the mayor who oversees East Jerusalem. "We don't know specifically about an obvious order or directive that was given by the prime minister's office. There's all kind of hints and an atmosphere that it is not wanted. There is kind of an overall message that we're getting that it's not really desirable to the government."
Aryeh King, head of an Israeli group buying land in East Jerusalem for private housing, confirms that his projects are being stalled.
"They are not saying there is a freeze, but in practice that's what's happening," says King. "There are plans that are simply not being presented, they never get onto the agenda. They don't admit that they're not considering them. They say it's in process and it stays in process. Things that usually take days are taking weeks, and things that usually take weeks are taking months."
Developers say the logjam in the planning process is creating havoc in the local housing market, where the scarcity of small apartments has caused a 30% rise in home prices in two years.
"This is the United States' contribution to raising the price of real estate in Jerusalem," says Nadav Lisovsky, vice president for marketing at B. Yair Building Corporation, one of Israel's largest developers. He says there is an effective freeze on almost all new projects across the pre-1967 border.
Whether or not the undeclared freeze is enough to get the Palestinian side into U.S.-brokered indirect talks remains to be seen, but the next crisis may already be looming. On Monday, the government said it was considering approval of Derech Ha'avot, an illegal settler outpost near Bethlehem, which would make it the first official new Israeli settlement since 1996 — and a clear challenge to both the Obama Administration and the Palestinians.