Prime Minister-designate Benjamin Netanyahu received 14 more days to form a new government Saturday, but his efforts to form a coalition seemed likely to be complicated by the likelihood of a new settlement construction freeze to improve Israel's international standing.

Netanyahu updated President Shimon Peres Saturday on his progress in negotiations to form a government, blaming unnamed parties' refusal to sit in the government with ultra-Orthodox parties as the root of his troubles, and was granted the extension.

Meanwhile, senior Netanyahu advisers stated that a new government coalition will have no choice but to imminently freeze construction in the Jewish communities outside the large settlement blocs in the West Bank.

Netanyahu and his advisers also believe that international pressure will force Israel to undertake steps toward renewing talks with the Palestinians that will help rehabilitate Israel's reputation with its friends in the West, even if they do not lead to renewed negotiations with the Palestinians.

The envisioned building freeze would not include East Jerusalem and the large settlement blocs of Ma'aleh Adumim, Gush Etzion and Ariel, but will include all the isolated settlements situated beyond the separation fence.

Netanyahu's intention to take steps to address the Palestinian issue has also found its way into coalition talks. Likud sources stated that the issue came up during several rounds of talks between Netanyahu and Habayit Hayehudi.

"International pressure is likely to create the need to implement small, measured steps in order to protect the big things," said a Likud representative during discussions with Habayit Hayehudi. These cryptic words were interpreted by Habayit Hayehudi figures to be referring to a possible settlement construction freeze.

"There won't be a problem with talks along the lines of two states [for two peoples]," said the head of Habayit Hayehudi's coalition negotiation team, MK Uri Ariel. "However, there won't be any readiness to implement any actions." Ariel refused to elaborate any further.