The offer suggests Israeli officials are quietly trying to find ways of restarting negotiations that would ultimately lead to the creation of a Palestinian state.

Saeb Erekat said the offer came last month through a foreign envoy who conveyed a message from Israeli Prime Minister Benjamin Netanyahu.

An Israeli official denied the offer was made. He spoke on condition of anonymity because of the sensitivity of the issue.

Erekat said the Palestinians dismissed it because it applied only to government construction. Most settlement building is done by private contractors, said Hagit Ofran of Peace Now, an anti-settlement Israeli watchdog.

“If Netanyahu wants to resume negotiations, he has to say that settlement building will stop. Either it stops or it doesn’t stop,” Erekat said.

Palestinians say they will not negotiate with Israel while settlement building continues in the West Bank and East Jerusalem. Israel has said the issue must be on the negotiating table and not serve as a precondition.

Israel captured the territories in the 1967 Mideast War, and has annexed East Jerusalem — a move that the international community doesn’t recognize.

Some half million Israeli Jews live in the West Bank and East Jerusalem. Palestinians say their presence, particularly in areas around Jerusalem and deep in the West Bank, would make the emergence of a viable state impossible.

Israeli-Palestinian negotiations sputtered to a halt long ago over the issue of settlement construction.

Israel agreed in the past to slow down settlement building for 10 months, but Palestinians only agreed to negotiate in the last few weeks of that period. Israeli officials refused to renew the slowdown, despite heavy US pressure to do so.