Israeli prime minister Benjamin Netanyahu has said that the current restrictions on West Bank settlements will not remain in place, however there will still be some limits on construction.
Israel's 10-month slowdown on new housing projects in West Bank settlements expires at the end of this month and is a key point of contention in newly launched peace talks with Palestinians.
Mr Netanyahu told Middle East envoy Tony Blair the Palestinians want a total freeze in construction. "That will not happen," he said.
Israel will not build "tens of thousands of housing units that are in the pipeline, but we will not freeze the lives of the residents" of the settlements, Mr Netanyahu said.