Prime Minister Binyamin Netanyahu is willing to show " great flexibility" regarding settlement construction in the West Bank, but Jerusalem is different, senior officials in the Prime Minister's Office said Tuesday among persistent reports that Netanyahu would soon be declaring a 10-month settlement moratorium. The officials would not confirm the reports, which began last week when former MK Yossi Beilin said Netanyahu was on the verge of declaring a moratorium, saying only that Israel was looking, together with the US and others, about how to get over the impasse that has left the diplomatic process stymied. A number of different options were being considered, the sources said, without elaborating. Despite Netanyahu's willingness to show "great flexibility" on the West Bank, there is a great deal of skepticism abroad whether Palestinian Authority President Mahmoud Abbas would agree to re-start the negotiations without receiving some kind of concession regarding housing starts in east Jerusalem, something the Prime Minister has ruled out. Netanyahu made clear several months ago that within the framework of negotiations, he would call for a moratorium on new housing starts in the West Bank, while allowing the continued construction of some 3,000 units already underway. Netanyahu has reiterated in recent meetings that the government's policy was not to build new settlements or expropriate new land for existing ones, and according to government sources has said that within the framework of the peace process "he would be willing to go further perhaps than any prime minister in the last decade in exercising the greatest possible restraint concerning the building of new housing in the West Bank." In a meeting with visiting German Foreign Minister Guido Westerwelle on Monday, Netanyahu said that he believed he was "uniquely positioned" to galvanize the support of the public to a " historic agreement with the Palestinians." Westerwelle, meanwhile, met President Shimon Peres on Tuesday, and - regarding the resumption of Israeli-Palestinian talks - Peres said after the meeting that "we are on the threshold" of new developments, though he did not provide any details. "We are very close to success or failure" he said, adding "I hope we will turn in the right direction." The political differences have been minimized, he said, whereas the psychological differences have been maximized. In the present crisis, psychology was a significant consideration he explained, "so we have to be very careful and wise." Greer Fay Cashman contributed to this report.