Benjamin Netanyahu, the Israeli prime minister, has ordered a reassessment of plans to build nearly 24,000 settler homes, saying he feared an international outcry that would divert attention from Israel's lobbying against a nuclear deal with Iran.
The right-wing Israeli leader announced the reversal on Tuesday in the face of stiff US opposition to settlement expansion in the occupied West Bank and East Jerusalem, and Palestinian anger that threatens three-month-old peace talks brokered by Washington.
Before news of Netanyahu's change of course, President Mahmoud Abbas ordered the Palestinian leadership to hold "an urgent emergency meeting in the coming hours, with all options on the table", the Palestinian Maan news agency reported.
Peace Now, which monitors settlement activity on occupied land Palestinians seek for a state, said the Housing Ministry had issued tenders late last month for drawing up construction plans, but that no building work was imminent.
Publication of the tenders had gone unnoticed in the media until Israel's left-leaning Haaretz newspaper and Peace Now reported on the potential projects earlier on Tuesday.
Netanyahu, a strong advocate of settlement building, appeared to have been caught unawares by the proposals, which were disclosed only days after John Kerry, US secretary of state, visited Israel and the West Bank in a bid to salvage peace negotiations that have shown little sign of progress.
Before leaving Israel, amid Netanyahu saying that "a very bad deal" was in the making between world powers and Iran over its nuclear programme, Kerry urged Israel to limit settlement activity.
In a slap down of a key partner in his governing coalition, Netanyahu reprimanded Uri Ariel, the housing minister, of the pro-settler Jewish Home party for publishing the tenders "without prior coordination".
A statement issued by Netanyahu's office said he ordered Ariel to reassess all of the proposed projects.
Publication of the tenders "created a needless confrontation with the international community just when we are making an effort to persuade [it] to reach a better agreement with Iran," the statement said.
"World attention must not be diverted from the primary goal - preventing Iran from achieving an agreement that would enable it to continue its nuclear military programme," Netanyahu's statement said.
Israel, widely believed to be the Middle East's only atomic power, has been pushing for total dismantling of Iran's nuclear-enrichment capabilities and cautioning against any premature easing of economic sanctions.