Israeli government sources downplayed reports Monday that the US was considering taking punitive measures, such as decreasing its support for Israel at the UN, if Jerusalem didn't comply with demands to freeze settlements. The officials said it was much too early in the debate over the issue for the Americans to threaten sanctions, with Israeli sources noting that while US President Barack Obama and Secretary of State Hillary Clinton had both recently called for a settlement freeze, they had not included an "if not" clause in their statements. When asked about The New York Times story, which said the US might not always veto UN Security Council resolutions opposed by Israel, State Department spokesman Robert Wood declined to discuss the details of conversations occurring between the two countries. He did stress, though, that "the president and the secretary have made clear that all the parties have responsibilities to fulfill to give Middle East peace efforts a chance to succeed." But he added that, "We've long worked to ensure that Israel is treated fairly at the United Nations. That will continue. And as you know, Israel is a close friend and ally, and we remain committed to its security." One Washington observer pointed out that the UN session was nearing its end, and others expressed skepticism that the US would change its pro-Israel posture at the international body. More controversial moves, such as conditional American loan guarantees, were not on the table, according to the story. And the conventional wisdom in Jerusalem is that the measures are ones that could be taken at the end of a debate on the issue, not during the middle. Sources in the Prime Minister's Office have repeatedly said discussions with the US were still underway regarding what exactly is meant by a "settlement freeze." Still, that interaction has become increasingly tense as the US pushes Israel to halt even "natural growth" in West Bank settlement blocs Israel expects to retain under any peace agreement. Israel sees that stance as contradicting previous understandings with the US, while the US is at the same time demanding Israel fulfill previously agreed on obligations. On Monday, Prime Minister Binyamin Netanyahu characterized the US demands to freeze all building east of the Green Line as "unreasonable," adding that he was "still unclear" as to what exactly the United States was demanding of Israel regarding construction in the settlements. The prime minister, briefing the Knesset Foreign Affairs and Defense Committee on his recent trip to Washington, said, "it is likely that we are not going to reach an agreement with the Americans" regarding settlement construction, but did his best to portray his meeting with US Obama in a positive light. One source in Jerusalem said it must be clear that the "proposed settlement policy of the Netanyahu government is more or less identical to that of previous governments, and that if someone is changing the ground rules, it is not Israel." The source, alluding to understandings on settlement construction that existed at the time of Bush administration, said if on the one hand Washington was calling on Israel to abide by all previous understandings, then "shouldn't the person asking be abiding by previous commitments and understandings as well?" At his briefing, Wood was pressed on this point as reporters asked whether the letter former president George W. Bush wrote to then-prime minister Ariel Sharon in 2004 speaking of expectations that Israel would retain these blocs still applied. "The United States lives up to its obligations," he said. "Right now, we are focused on, as I said, trying to get both sides to adhere to the road map so that we can move forward toward that two-state solution. And it's not going to be easy, as you know. We've spoken to that many times. And we're going to continue to try to do that." Asked again if the Bush letter was binding, Wood said, "This administration has, as I said, laid out its proposals, its strategy for moving forward. And that's about the best I can help you with on that." At a press conference last week, Clinton responded to a similar question by referring to the policy review and conversations with the parties that US Middle East envoy George Mitchell was involved in. When pressed a second time, she said, "We are looking at all of that." After meeting UN Secretary-General Ban Ki-moon in New York on Monday, Defense Minister Ehud Barak deflected questions about whether Israel would freeze settlement expansion, a major issue to emerge from recent talks between Netanyahu and Obama. "Toward the end of the visit, I'd be better equipped to respond to your questions," Barak said, referring to upcoming meetings with US officials in Washington. Barak also did not clarify the Israeli government's position on a two-state solution that the Obama administration supports. He said only, "Israel looks for making peace with our neighbors." E.B. Solomont contributed to the report.