The announcement on Wednesday of the partial freeze was welcomed by the United States, which has been pressing Israel to limit settlement activities in the West Bank.
Israel's foreign minister shrugged off on Thursday the Palestinian dismissal of a 10-month moratorium on some building in West Bank settlements, saying winning international support was more important.
"The last thing that should interest us is the Palestinians' concern. Before the Palestinian issue, what should interest us is our friends in the world," Avigdor Lieberman told Israel Radio. "We spoke to them and most said 'help us to help you'."
The announcement on Wednesday of the partial freeze was welcomed by the United States. It has been pressing Israel to limit settlement activities in the West Bank to coax Palestinians to renew peace negotiations.
But prime minister Benjamin Netanyahu's decision, ratified by Lieberman, leader of the far-right Yisrael Beitenu party, and other members of Israel's security cabinet, fell short of Palestinian President Mahmoud Abbas's demands.
Abbas has called for a full halt to settlement construction as a condition for reviving peace negotiations suspended since December. Netanyahu has rejected a complete cessation and Washington has said there should be no preconditions for talks.
"The ball is in the Palestinian court," Lieberman said. Under the Israeli plan, no new residential building permits would be issued and no new residential construction could start for 10 months in "Judea and Samaria", Israel''s terms for the West Bank excluding annexed areas around Jerusalem.
But some 3,000 homes already approved or under construction would be completed during that time. Palestinians wanted Jerusalem and its surrounding areas included in a freeze. They have voiced fears that Israeli settlements, built on land occupied in a 1967 war, would deny them a viable state.
US pressure
Palestinian negotiator Saeb Erekat told Israeli Army Radio the Israeli move was designed to deflect US pressure. "At the end of the day, Netanyahu needs to make peace with us, the Palestinians, he doesn't need to make peace with Americans," Erekat said.
"If that's what he wants, that is his business. The last I know, Washington is 6,000 miles from Jerusalem, while Jericho (in the West Bank) is 67," he said.
Israeli defence minister Ehud Barak said he hoped settler leaders would view the partial freeze in the context of ensuring Israel's good relations with the United States, citing the need to maintain Israel's military superiority in the region. Top of the Netanyahu government's agenda is Iran's nuclear programme.
"Now Netanyahu believes that he will be given a respite. That he did his part," political commentator Ben Caspit wrote in the Maariv daily, referring to US pressure on Israel over settlements.
Other Israeli commentators speculated US president Barack Obama, while aware Israel's move did not meet Palestinian demands, wanted to show some progress in his peace efforts before receiving the Nobel Peace Prize in Oslo on December 10.
Some 500,000 Israelis live in the West Bank and annexed areas around Jerusalem among 2.7 million Palestinians. Israel regards all of Jerusalem as its capital, a claim that is not recognised internationally.
Palestinians want East Jerusalem as the capital of a state they hope to establish in the West Bank and Gaza Strip, territory now controlled by Hamas Islamists opposed to peace talks with Israel.
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