Tensions between Israel and Palestine over the construction of a new settlement in the West Bank have reached new heights in the wake of the recent terror attacks, and forced Netanyahu to back away from expansionist ambitions.

In the wake of several deadly attacks that kicked off a new wave of violence between Israelis and Palestinians recently, the US has reportedly pressured Benjamin Netanyahu to call off a plan to construct a new Jewish settlement in the West Bank. On Tuesday evening, Israeli settler leaders were told that additional settlement construction would be put on hold for the time being.

"We weren’t told that there’s no building and there’s a freeze. We were told that there is an inability to approve and advance construction under current pressures," Yesha council Chairman Avi Roeh said.

The meeting between Netanyahu and Yesha Council leaders was followed by an alleged ultimatum on the part of the US that it would not veto a UN Security Council resolution claiming that the settlements in the West Bank were illegal. The Yesha Council is an umbrella organization of municipal councils of Jewish settlements in the West Bank.

Netanyahu was backtracking on his initial plans for renewed construction in Jewish settlements as he had high hopes for the Obama administration’s support in the UN.

The prime minister’s foreign policy is directed at preventing UN criticism over sensitive issues (such as alleged human rights violations) rather than obtain the support of Israeli citizens over its activities in the occupied territories.

On Wednesday UN Secretary-General Ban Ki-moon called for a "prompt and transparent" investigation into the recent deadly clashes between Israeli security officials and Palestinian civilians to determine "whether the use of force was proportional."

According to some sources, who agreed to speak on the condition of anonymity, Israel values its US sponsorship far more than it does its settlement constructions in the West Bank.

"We will not endanger our international support for some construction tender or for expanding construction in Itamar," a senior source was quoted as saying.

Settlers believe that the latest decision of the Israeli Prime minister is a "serious mistake" and will do a number on the country from a long-term perspective.

"Strategically, it’s a serious mistake not to approve construction; it will harm the settlement [project] and in the end cause harm to Jerusalem and the entire state of Israel," Roeh claimed.

Israeli authorities were not immediately available for comment. The security issue has remained the number one question in the State of Israel so far, amid perpetual Israeli-Palestinian hostility.

Earlier this week, Benjamin Netanyahu declared that Israel is in an “all-out war” against “Palestinian terror” and promised to wage a "fight to the death" in the wake of the killing of four Israelis in Jerusalem.