"It's fair to say that the U.S. is discouraging actions that it believes will unduly distract the principals from focusing on the advancement of peace negotiations". Intelligence Minister Israel Katz, a supporter of the bill, has said this would "ensure a Jewish majority in a united Jerusalem".
If it passes, settlements of Ma'aleh Adumim, Gush Etzion, Efrat, Beitar Illit and Givat Ze'ev will be included under Jerusalem's municipal jurisdiction. U.S. Ambassador to Israel David Friedman also participated in the meeting, which was "a general check in on peace conversations", the official said.
David Bitan, the Likud party's parliamentary whip and a close Netanyahu ally, told Army Radio the vote set for Sunday is delayed because "there is American pressure claiming this is annexation". Its opponents argue that it is a step towards full unilateral annexation of the West Bank settlements affected - a move that would be sure to spark global outrage.
Under the same proposal, some 100,000 Palestinians living in neighborhoods outside the security barrier would be removed from the city's census and given a new municipality.More news: WhatsApp might've revealed its next major new feature
So why does the USA oppose the bill?
Australian Prime Minister Malcolm Turnbull checked into the King David Hotel in Jerusalem at 2 p.m. on Monday, just less than two days later than he originally intended, and nearly immediately entered into discussions with Prime Minister Benjamin Netanyahu. According to Haaretz newspaper, Netanyahu told cabinet members on Sunday that the bill must be discussed with U.S. officials before it can move forward. He disputed that the bill amounted to "annexation".
Israel's claim to all of Jerusalem as its capital, including the eastern sector it captured along with the West Bank and Gaza Strip in a 1967 Middle East war, has not won worldwide recognition. Israel officially maintains that the settlements are not illegal, because the land is disputed rather than occupied.
They lie on land the worldwide community recognises as Palestinian but which Israel has occupied since 1967.