Anti-settlement group Peace Now, which monitors all new Israeli settlement construction, said Netanyahu has not approved new tenders or announcements of new building plans in the settlements since he won a new term in January's election.
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"It seems that Netanyahu took it upon himself to follow a policy of restraint," Peace Now said in a statement. It said Netanyahu was likely trying to avoid colliding with the US at a time when US Secretary of State John Kerry is attempting to restart peace negotiations.
The group said it did not know how long the freeze on new settlement building would hold, and noted that previously started settlement building is proceeding.
The Yesha settlers council, which promotes settlement construction, also claimed a freeze was in place.
Yigal Dilmoni, a Yesha official, said Netanyahu's office confirmed to him that the prime minister has stopped approving housing tenders.
"This does not help anything, and it is discriminatory," Dilmoni said. "We are severely against this."
Peace talks broke down in 2008 and have remained stalled in large part because of Israeli settlement construction in the West Bank and east Jerusalem. The Palestinians have insisted that Israel halt settlement construction before peace talks to resume. Israel says the talks should take place without preconditions.
Following President Obama's visit to the region in March, Kerry has been shuttling between the two sides to try to break the deadlock.
Last week, after some prodding by Kerry, Arab leaders renewed a decade-old comprehensive peace offer, with softer language to appeal to Israel, to help restart talks. Israel has not responded to the offer. Kerry is scheduled to meet with Israeli and Palestinian representatives in Rome this week.
Last September, the Palestinians won upgraded status at the United Nations. Netanyahu responded by announcing plans to build hundreds of new homes in settlements. But those plans never moved forward.
Israeli Housing Minister Uri Ariel, a pro-settler hard-liner, met with Netanyahu recently. He asked Netanyahu to push forward the housing tenders, but Netanyahu refused, Dilmoni claimed.
The minister refused to comment on the reported settlement freeze in an Army Radio interview on Tuesday.
"I do not confirm things that I do with the Prime Minister. Therefore I cannot comment on this," Ariel said.
Netanyahu's office declined to comment.
Nabil Abu Rdeneh, spokesman for Palestinian President Mahmoud Abbas, said the U.S. is exerting efforts to "create the needed atmosphere" for new talks, but that he was unaware of any Israeli construction freeze.
"We should hear this officially from the Israeli government," he said.
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