In a move certain to cause consternation in the Arab world, but likely to relieve pressure from within his own Likud party, Prime Minister Binyamin Netanyahu next week intends to approve plans for hundreds of new housing units in the West Bank. Only after this new building is green-lighted will he consider a moratorium "for a few months" on further construction, a senior source in the Prime Minister's Office told The Jerusalem Post Thursday night. According to the source, the new construction would be over and beyond the 2,500 units that are already in various stages of construction in the territories, and which will continue to be built. The source also stressed that the new housing was in the West Bank rather than in Jerusalem. The source said that the temporary moratorium would be put in place if the "conditions are right," including if the Arab states were forthcoming in providing Israel with normalization gestures. Some observers suggested that Netanyahu would be unlikely to embark upon the new building program without coordination with the Obama administration, given the intensity of ongoing contacts between Jerusalem and US envoy George Mitchell. According to another diplomatic source, the more Israel would get from the Arab world, the more "flexible" it would be willing to be. These comments came amid persistent reports Thursday that Israel and the US were close to an agreement on the conditions for re-launching the diplomatic process. Senior officials in the Prime Minister's Office continued to hold close to their chest details of the possible agreement, with one official saying there were still numerous "moving parts," and that the discussions with Mitchell would continue next week in Jerusalem. The official was unwilling to confirm persistent reports that Israel had agreed eventually to a nine month freeze on issuing new tenders in the West Bank, excluding east Jerusalem. A Senior State Department official, though, told the Post that a freeze of nine months was "reasonable" when it came to meeting the US goal of "getting a freeze that's long enough to be credible and for negotiations to proceed." He added that though no definite time-frame had been finalized, any freeze would in nature be temporary, as it would come amid negotiations toward a long-term goal. He added that any decided on timeframe could be extended. He would not confirm the specific details under consideration, but did say regarding the talks between Mitchell and the Israelis that "we're getting closer." He indicated that Mitchell's return visit at the end of next week could be his final trip before a formal announcement of an agreement was made. When it comes to Israel's position, the Israeli official said that careful attention should be paid to what Netanyahu has been saying publicly over the last few months. The prime minister has said consistently that Israel's sovereignty over Jerusalem was unequivocal and the government would not agree to any limitations on it; that Israel had to ensure the continuation of normal life in the settlements; and that a balance had to be found between the need to launch a political process, and the need to ensure normal life in the settlements. Both Israel and US officials characterized as "good" a meeting Mitchell had in New York on Wednesday with Netanyahu's envoy Yitzhak Molcho and Defense Minister Ehud Barak's chief of Staff Mike Herzog, with State Department spokesman Ian Kelley saying that Mitchell and the Israel delegation "reaffirmed their commitment to comprehensive peace, and concrete steps by all parties toward that goal." The senior State Department official who spoke to the Post characterized the meeting as "warm" and "friendly," rejecting speculation of tensions. Though he noted that the US is looking to Israel to take hard steps, which can make for difficult conversations, he stressed that "there's no animus." One of the issues within the framework of the comprehensive peace moves that the US is seeking, and that still needs to be finalized, is what steps Israel could expect from the Arab world. "There is no question that the more the Arab world shows that it is willing to take steps, the more flexibility Israel would be able to show on these issues," one senior Israeli official said, adding that Israel would show the most flexibility were Saudi Arabia to make some gestures. Saudi Arabia has told both US President Barack Obama in private meetings, and US Secretary of State Hillary Clinton in public ones, that it made its gestures to Israel by initiating the Arab peace place in 2002, and would not take any steps toward normalization until an agreement was signed. There is little expectation in Jerusalem that the Saudis would change their mind. Instead what is being discussed is the reopening of an economic interest section with Morocco, as well as the re-establishment of low-level ties with Qatar and Oman. In addition, other gestures that are being discussed are providing Israeli airlines with the right to overfly certain Arab countries, as well as educational and cultural exchanges with Persian Gulf countries. Along with what gestures would be made, another question that has been discussed with Mitchell has to do with synchronization, and whether these moves would be announced the same time a settlement moratorium was declared, or whether these steps would come sometime afterward. In addition, the discussion with Mitchell over the last few months has also deal with issues such as the contours of any future political process, whether there would be a time frame for the negotiations, and what principles would guide those talks. There is little expectation Obama would come out with his own peace plan, but rather announce when the time is right that the sides have decided to restart negotiations. Many different components have come into play in the discussions on the settlement issue, such as what type of building needed to be frozen - public building as well as private homes, or just private homes. Likewise there is the question of whether new construction would be frozen in the large settlement blocks, and, indeed, what constituted a large settlement block. The sides have also discussed how activity in the settlements would be renewed once the freeze was over, since Israel has made clear that it could not be expected to freeze life in the settlements until the end of the negotiation process, something that could take years.