Israel will continue to allow some construction in West Bank settlements despite US calls for a freeze on its work, a government spokesman says.
Mark Regev said the fate of the settlements should be decided in peace negotiations with the Palestinians.
His remarks appear to be a rebuff to US Secretary of State Hillary Clinton, who said all such activity should cease.
Her comments came hours before Palestinian President Mahmoud Abbas was due to meet US President Barack Obama.
Mrs Clinton said on Wednesday there must be no exceptions to President Obama's demands for Israel's settlement work to stop.
Speaking to reporters after a meeting with her Egyptian counterpart, Mrs Clinton said that the president was "very clear" with Prime Minister Benjamin Netanyahu at their recent meeting that there should be a stop to all settlements.
"Not some settlements, not outposts, not natural growth exceptions," Mrs Clinton said.
"We think it is in the best interest of the effort that we are engaged in that settlement expansion cease."
Correspondents say it is the first time in years that US officials have been so vocal in calling for a settlement freeze in the Palestinian territories.
Stumbling block
Mr Regev said on Thursday that the future of the settlements would be decided only when peace negotiations were held with the Palestinians.
"In the interim period, we have to allow normal life in those communities to continue," he said.
Mr Netanyahu said no new settlements would be built, but natural growth in existing settlements should be allowed.
"There is no way that we are going to tell people not to have children or to force young people to move away from their families," he was quoted as telling the Israeli cabinet.
WEST BANK SETTLEMENTS
# Construction of settlements began in 1967, shortly after the Six Day War
# Some 280,000 Israelis now live in the 121 officially-recognised settlements in the West Bank
# A further 190,000 Israelis live in settlements in Palestinian East Jerusalem
# The largest West Bank settlement is Ma'ale Adumim, where more than 30,000 people were living in 2005
# There are a further 102 unauthorised outposts in the West Bank which are not officially recognised by Israel
# The population of West Bank settlements has been growing at a rate of 5-6% since 2001
# Source: Peace Now
However, he pledged to remove makeshift outposts in the West Bank - small settlements, sometimes with only a few people - that the Israeli government itself considers illegal.
"We will take care of them, if possible by dialogue," he said. "There is no doubt that we have committed ourselves to deal with them."
The issue of Jewish settlements in the West Bank is one of the biggest stumbling blocks to President Obama's bid to resume the Middle East peace process.
The Palestinian Authority says it has ruled out restarting peace talks with Israel unless it freezes settlement activity and removes all roadblocks in the West Bank.
President Abbas is expected to reiterate the conditions during talks at the White House with Mr Obama.
Some 500,000 Jews live in more than 100 settlements built since Israel's 1967 occupation of the West Bank and Arab East Jerusalem. The settlements are illegal under international law, though Israel disputes this.
Under the US-backed 2003 roadmap peace plan, Israel is obliged to end all settlement activity, specifically including natural growth.
The plan also requires the Palestinian Authority to crack down on militants who seek to attack Israelis.
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