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Source: http://www.ynetnews.com/articles/0,7340,L-3985859,00.html
Israel Not Discussing Jerusalem Construction with U.S.
(Ynet News) Attila Somfalvi - The Israeli Prime Minister's Office said that negotiations between Israel and the U.S. regarding the proposal to freeze settlement construction exclude building in Jerusalem. The PM's office denied reports suggesting that Prime Minister Netanyahu's demand to continue construction in Jerusalem was the main bone of contention.