It remained unclear if the slowdown constituted a formal moratorium or how long it would last, but the move reflected Netanyahu's need to mend a serious rift with the U.S. over Israeli construction on lands the Palestinians claim for a future state as Washington tries to bring the Palestinians back to the negotiating table.
An Israeli government official claimed a weeks-long delay in reviewing plans for new construction was nothing more than a bureaucratic issue. Nonetheless, signs of the freeze drew angry criticism from hard-line lawmakers, including a member of Netanyahu's own party who warned the government could collapse over the matter.
Construction in east Jerusalem has been a major sticking point since Israel infuriated Washington last month by announcing a major new east Jerusalem housing development during a visit by U.S. Vice President Joe Biden.
In Washington, U.S. officials said they were aware of news of the freeze but were seeking clarification from the Israeli government and had no immediate comment.
Jerusalem Councilman Meir Margalit of the dovish Meretz Party said top Jerusalem officials intimately involved with construction projects told him that Netanyahu's office ordered a freeze after Washington expressed anger over the building plans.
"The government ordered the Interior Ministry immediately after the Biden incident to not even talk about new construction for Jewish homes in east Jerusalem," Margalit said. "It's not just that building has stopped: The committees that deal with this are not even meeting anymore."
He declined to identify the officials who informed him of the order because they had not approved the disclosure of their names. A Jerusalem municipal spokesman did not immediately return a call seeking interviews with the officials.
Another councilman, Meir Turujamen, who sits on the Interior Ministry committee that approves building plans, said his panel has not met since the Biden visit, after previously meeting once weekly.
"I wrote a letter about three weeks or a month ago asking (Interior Minister Eli) Yishai why the committee isn't convening," he said. "To this day I haven't received an answer."
Turujamen added that the last time his committee met was to make the provocative decision to approve the 1,600-apartment Ramat Shlomo project that riled the Americans.
He said he had received no official word of a de facto freeze order, "but based on the situation, those are the facts."
Netanyahu had previously announced a 10-month slowdown in West Bank construction in an attempt to restart peace talks. But he insisted that east Jerusalem not be included in those restrictions.
After word of the Ramat Shlomo project got out the Palestinians called off indirect U.S.-mediated peace talks. Palestinian leaders, who also are facing American pressure, will seek backing this week from the Arab League to renew participation in those talks.
Palestinian negotiator Saeb Erekat said he has not heard anything official about an Israeli construction freeze in east Jerusalem. "What counts for us is what we'll be seeing on the ground," he said. "We hope the Israeli government will halt settlement activity so we can give proximity talks the chance they deserve."
Attempts to advance construction haven't halted altogether. A lower-level municipal planning committee last week gave preliminary approval to a synagogue and kindergarten in a Jewish neighborhood in east Jerusalem, he said. But that decision still needs Interior Ministry approval.
An engineer who oversees residential construction in a Jewish neighborhood in east Jerusalem said requests for proposals to build hundreds of apartments already approved haven't gone out. The engineer spoke on condition of anonymity because he did not want to jeopardize his business ties with the city.
Netanyahu has said he was taken by surprise by the approval of the Ramat Shlomo project while Biden was here, and aides announced that he would make sure he would be kept in the loop in the future before any decisions were taken on controversial construction.
But he also has repeatedly stated he would not freeze construction.
Asked about Margalit's claim that a freeze order was in effect, government spokesman Mark Regev replied: "Following the Biden visit and the mishap, the prime minister asked that a mechanism be put in place to prevent a recurrence of this kind of debacle."
He would not elaborate, and stopped short of saying Netanyahu had ordered a freeze.
Interior Ministry spokeswoman Efrat Orbach said this mechanism explained why planning committee meetings were being delayed, because now multiple ministries had to be involved in the coordination.
Israel captured east Jerusalem, the site of sacred shrines holy to Jews, Muslims and Christians, in the 1967 Middle East war and immediately annexed it. Some 180,000 Israelis now live in Jewish neighborhoods built there in the past four decades, and about 2,000 more live in the heart of traditionally Arab neighborhoods.
The Palestinians, the U.S. and the rest of the international community do not recognize the annexation.
The hawkish Netanyahu, however, has said repeatedly that east Jerusalem will remain under Israeli sovereignty in any peace deal, a position the Palestinians reject. Most of the partners in his hard-line coalition have publicly opposed sharing Jerusalem with the Palestinians or freezing construction in east Jerusalem.
Netanyahu huddled with members of his Likud Party on Monday and denied any freeze was in place, said Danny Danon, a lawmaker who attended the meeting.
"If we see there is a freeze, we will not sit quietly and the prime minister knows that," he said. "This coalition will not allow the prime minister to freeze building in Jerusalem."
Also Monday, Israeli troops killed a wanted Palestinian militant in a raid on a West Bank house. The man was identified by relatives as Hamas activist Ali Sweiti.
The Israeli army said Sweiti was wanted in five shooting attacks, one of which killed a paramilitary policeman in 2004. The army said he was killed after he refused calls to surrender and opened fire at soldiers.
More on U.S.-Israel Row:
Israel Won't Halt Construction in East Jerusalem
Israel's Netanyahu Backs Out of U.S. Nuke Summit
Row with U.S. Shakes Israeli Confidence
Israeli Pols Rally Around Netanyahu
Analysis: Netanyahu Can't Have it All
U.S.-Israeli Talks End without Accord
U.S., Israel Struggle to Repair Breach
By Associated Press Writer Amy Teibel; AP writer Ian Deitch contributed to this report