To the world it was presented as an historic step by Israel to try to restart the Middle East peace process.

But Israel's promised 10-month freeze on any new construction in the disputed West Bank, made at the strong behest of the U.S., now looks to be thawing around the edges in the wake of strong protests from Israeli settlers.

Indeed, just a week after declaring the moratorium — and hiring batches of new inspectors to enforce it — Israeli authorities have now approved the construction of 84 buildings in Jewish settlements in the West Bank, saying they do not fall under the strict terms of the moratorium.

The announcement came just ahead of a meeting between Israel's Prime Minister Benjamin Netanyahu and settler leaders Thursday and after another day of occasionally violent protests by scores of settlers in the West Bank.

Israeli police officers detain a Jewish settler during the demolition of makeshift structures in the unauthorised outpost of Ramat Migron, near the West Bank city of Ramallah, in November 2009. (Baz Ratner/Reusters)

It also comes as the European Union, seeking to put pressure of its own on the Middle East peace process, has drawn up a proposal calling for the partition of Jerusalem and to establish it as the capital of both Israel and Palestine.

A draft of the proposal, leaked to an Israeli newspaper Tuesday, suggests that the EU would also recognize a unilateral Palestinian declaration of independence.

Temporary measure

The settlement freeze, declared at the end of November, was only ever meant to be a temporary measure to try to draw Palestinian negotiators to the table, Netanyahu has stressed.

"We shall resume building once the moratorium is over," he stated.

"The future final-status accord in Judea and Samaria [the West Bank] will be determined at the end of negotiations — and not a day earlier."

The moratorium was also limited in scope. For example, it did not apply to public buildings or to Jewish construction in East Jerusalem, which the Palestinians claim as the capital of their future state.

But it was nevertheless the first time an Israeli government of any political stripe had declared such a freeze.

What made it more unusual was that the declaration was made by a right-wing Israeli government, made up of religious and ultra-nationalist parties, the kind who draw much of their support from the settler movement.

American pressure

The moratorium was clearly taken under pressure from Washington, which hoped to re-start peace talks between Israel and the Palestinians.

In his speech in Cairo in June, U.S. President Barack Obama stressed the importance of a settlement freeze as a precursor to good-faith negotiations.

Obama reiterated that peace talks, which had been stalled since the election of the more conservative Netanyahu government in March, were the only way to end the conflict.

And he repeated the American vision of two states for two peoples, living side by side in peace and security.

Too little

However, the Palestinian response to Israel's announcement of a settlement freeze has not been very positive.

Palestinian President Mahmoud Abbas, in fact, rejected the initiative, saying it was not serious.

He said it would not stop some 3,000 homes already under construction in the West Bank from being completed and that it would not stop any Israeli building in East Jerusalem.

Abbas maintained his position of refusing to meet with the Israeli prime minister until all Jewish settlement activity in the disputed areas ceases. He also criticized Obama for failing to exert sufficient pressure on Israel to get this done.

Enter the Europeans

The stalled peace talks and other problems have left Abbas dispirited.

Last month, he said he would not stand again in the elections that are due to be held next year. But he is now known to be mulling a separate plan to declare Palestinian independence unilaterally, which is receiving significant support in Europe.

For example, Sweden, which holds the current rotating presidency of the European Union, has drawn up a proposal to partition Jerusalem, a first step in establishing it as the capital of both Israel and Palestine.

Israel's Foreign Ministry warned that such a move would harm the chances of renewing peace negotiations, as well as the EU's ability to take part as a mediator.

Opposition leader Tzipi Livni also wrote to Sweden's foreign minister, Carl Bildt, urging him to abandon the proposal.

"I wish to convey my deep concern regarding what appears to be an attempt to prejudge the outcome of issues reserved for permanent status negotiations," Livni, a former foreign minister herself, wrote.

However the Israeli campaign does not appear likely to succeed.

A member of the Swedish Parliament's committee on foreign affairs, Hans Linde, said Wednesday that the proposal enjoyed great support in Sweden.

The EU foreign ministers are to meet in Brussels on Dec. 7 for a two-day discussion on the Mideast peace process, after which they are expected to deliver a statement outlining their policy for the region.