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Government sources and the Jordan Valley Regional Council on Monday denied media reports that final approval had been given to construct 20 new homes in the Maskiot settlement in the Jordan Valley.
Government and Defense Ministry sources said nothing new has happened on the project since July, when approval was given for infrastructure and planning at the site.
Prime Minister Binyamin Netanyahu has not dealt with the issue and no new decisions regarding construction have been made, a government source said.
Permits have not yet been given for construction, added Jordan Valley Regional Council head David Elhaiini.
False news that the project had received final approval circulated in the media after the Jordan Valley Regional Council led potential contractors on a tour of the site on Sunday.
The story broke just hours before Netanyahu was scheduled to sit down for his first White House visit with US President Barack Obama. American opposition to continued settlement construction was expected to be one of the divisive points in the conversation.
The media report on Maskiot drew an immediate response from an adviser to Palestinian Authority President Mahmoud Abbas, who said it proved Israel was tightening its hold on the West Bank.
"With the decision coming while Netanyahu is visiting Washington, only one message comes out of this visit: Israel will continue its old policy and will not abide by the international will and give the Palestinians their national rights," Sabri Saidam said.
The project has been controversial since it garnered headlines at the end of 2006. It called for constructing homes on a tract of land deep in the Jordan Valley that had been authorized for settlement in the mid-1980s, but on which no permanent community had ever been set up.
Opponents of the project accused the government of playing a semantics game. They said that building homes for a new community on this spot was the equivalent to the creation of a new settlement.
Located off a small road that winds into the Jordan Valley hills, Maskiot, as of 1982, was home to a military base. Since 2001 it has housed a small small pre-military Orthodox academy for young men.
Already in the fall of 2005, former defense minister Shaul Mofaz and former prime minister Ariel Sharon gave initial approvals for a 100-unit project which was intended, in part, to house families of evacuees from the former Gush Katif settlement of Shirat Hayam.
But when former defense minister Amir Peretz tried to give the project its final set of approvals, he had to back down after the international community, including the United States, condemned the move.
As they waited for the diplomatic storm to clear, eight families, mostly from Shirat Hayam, moved to the site. Two of them moved into empty apartments and six more placed caravans on the site.
By July 2008, Defense Minister Ehud Barak approved infrastructure and planning for a 20-home project on the site. But his ministry cautioned that final approvals would be needed before any construction could take place, and that none had been given.
Elhaiini said he had been surprised by the flurry of stories Sunday's contractors' tour had generated.
"We did not come as thieves in the night," he said. Everything was legal and aboveboard and had all the required signatures, Elhaiini added.
The contractors' tour, he said, was scheduled in advance of Netanyahu's visit to DC. The fact that two events happened almost back-to-back, he said, "was an amazing coincidence." He said he was confident that the project would move forward.
It was an optimism shared by Yossi Hazut, formerly of Shirat Hayam, who lives at the site already with his family.
He said he expected that by the end of the year six more caravans will have been placed there and that the community would continue to grow.
AP contributed to this report.