Prime Minister Benjamin Netanyahu ,Defense Minister Ehud Barak and Interior Minister Eli Yishai met overnight Thursday ahead of the Cabinet's vote on a 90-day construction moratorium in the West Bank's Jewish settlements.
Yishai, who heads the Shas party, demanded that the government approve the construction of dozens of housing units in the West Bank once the freeze expires.
It is estimated that Barak will agree to approve the construction in exchange for Shas' support of a three-month freeze. The religious party is also demanding assurances that construction in east Jerusalem will continue during the West Bank moratorium.
Israel is awaiting a crucial document from the US meant to persuade government hard-liners to renew a ban on settlement construction so that the stalled Mideast peace talks could resume.
A US official told The Associated Press on Wednesday that Washington was drafting a letter detailing understandings on the proposed 90-day building moratorium that Secretary of State Hillary Rodham Clinton reached with Netanyahu in New York last week.
Sources close to Yishai said Shas remains opposed to another settlement construction freeze.
Meanwhile, Habayit Hayehudi Chairman Daniel Hershkowitz said that if an additional construction freeze was approved by the government his party would "see itself free of all coalition obligations and commitments".
In a meeting with activists the science and technology minister said that he had expressed his fundamental opposition to the "immoral" freeze, for it basically means that the prime minister has made a decision to take his party out of the coalition and that it "would prove that the prime minister is set to make additional concessions, and I hope and believe that this is not the case.
"It is hypocritical of the Americans to demand a construction freeze for Jews in places they consider to be disputed, while the Palestinians continue to build without restrictions," he added.
AP contributed to the report