Netanyahu reaches out to Clinton on deadlock over Israeli settlements

Israeli Prime Minister Binyamin Netanyahu called Secretary of State Hillary Rodham Clinton Thursday night with specific proposals to improve the prospects for peace in the Middle East, in an effort to end the fierce dispute over Israeli building in the disputed parts of Jerusalem, U.S. officials said.

Nethanyahu's proposals, while not immediately disclosed, were sufficient enough that the Obama administration will send special envoy George Mitchell back to the region on Sunday in an effort to start indirect talks between Israelis and Palestinians. His planned trip this week was scrubbed as the administration awaited Nethanyahu's response to Clinton's blistering 45-minute call last Friday to the Israeli prime minister.

Clinton and President Obama, who jointly wrote out the points for her call, were furious that Israel announced 1,600 housing units were planned in east Jerusalem as Vice President Biden was on a goodwill trip to Israel. Netanyahu agreed the timing of the announcement was poor, but has publicly maintained that Israel has a right to build in parts of Jerusalem that it had annexed after the 1967 war. Palestinians want to claim East Jerusalem as the capital of a Palestinian state in any peace deal.

In the call last Friday, Clinton demanded the Netanyahu reverse the housing decision, make positive gestures to the Palestinians and agree to put the status of Jerusalem on the table during the indirect talks.

In the last latest call Thursday, "they discussed the specific actions that might be taken to improve the atmosphere for progress toward peace," State Department spokesman P.J. Crowley said in a statement issued from Moscow, where Clinton is meeting with Russian officials. "We are going to review the Prime Minister's response and continue our discussions with both sides to keep proximity talks moving forward."

He added that Mitchell will meet with Netanyahu and Palestinian President Mahmoud Abbas.