Israeli Prime Minister Ehud Olmert has ordered the Housing Ministry not to unilaterally issue any additional building permits on occupied land in the West Bank, Israeli officials said on Friday.

Olmert was caught off guard by a series of Housing Ministry announcements on settlements that have opened a rift in month-old peace talks with the Palestinians, the officials said on condition of anonymity.

While the order means all new tenders for construction will have to go through Olmert's office, it is unclear to what extent the prime minister intends to curb building within existing settlements.

Olmert, in a meeting on Thursday with Palestinian President Mahmoud Abbas, balked at promising to stop construction that is already authorized or under way in settlements in the Jerusalem area, Israeli officials said.

The prime minister's office and the Housing Ministry had no immediate comment.

U.S.-backed peace talks, launched at a conference in Annapolis, Maryland last month, have bogged down since Israel announced plans to build hundreds of new homes in an area near Jerusalem known to Israelis as Har Homa and to Palestinians as Jabal Abu Ghneim.

In their meeting in Jerusalem, the first since Annapolis, Olmert and Abbas agreed to push ahead with the negotiations despite the dispute over settlements.

Chief Palestinian negotiator Ahmed Qurie told Reuters that Olmert assured Abbas that "there will be measures on the ground taken by the Israeli government in relation to the issue of settlements." Qurie offered no details.

PEACE NOW

The anti-settlement group Peace Now said thousands of housing units approved over the years can still be built even if Olmert decided to block new tenders.

"He (Olmert) can stop it. He has the authority to say, 'We've already approved it but we're not going to let you build'," said Settlement Watch Director Hagit Ofran.

The YESHA settler movement's spokesman, Yishai Hollander, said a freeze on new tenders would amount to "another surrender to the Palestinians and Americans."

YESHA said in October that the Defense Ministry was already blocking construction in Jewish settlements in the occupied West Bank to put pressure on residents to leave dozens of outposts built without government authorization.

The Palestinians say that the road map's explicit call for a halt to all settlement activity means all Israeli building on occupied land, including within Har Homa, is prohibited.

Israel argues that construction within built-up areas of existing settlements is permissible as long as no new enclaves are built and no additional occupied lands are confiscated.

Palestinians see the building of Har Homa as the last rampart in a wall of settlements encircling Arab East Jerusalem, cutting it off from the rest of the occupied West Bank. They say it is a strategic move by Israel to pre-empt any possibility of East Jerusalem becoming the Palestinian capital.

Israel's Har Homa plan has also drawn rare criticism from the United States, Israel's key ally. Building at the same settlement derailed a previous round of talks in 1997.

In addition to Har Homa, Israel's Housing Ministry has announced plans for new building within the Maale Adumim settlement which the Jewish state hopes to keep as part of any final peace deal.