Israel is being urged to extend a freeze on new settlements in the West Bank when fresh peace talks resume on Tuesday in Sharm el Sheik.
Prime Minister Benjamin Netanyahu has said current restrictions will not stay in place but US negotiators fear talks will stall if construction on new housing resumes.
A 10-month freeze on building work in West Bank towns ends on September 26.
US President Barack Obama has said it would “make sense” to extend the moratorium whilst peace talks continue.
Israel, however, is unwilling to rule out further construction and is under pressure from settlers not to give ground on the issue.
The Palestinians have repeatedly threatened to halt the peace process should house building resume.
Many are angry that Israel is prepared to jeopardise the talks so early.
Hopes are high on both sides that the new talks will succeed.