JERUSALEM, Israel (AFP) – Israel will not agree to US demands to freeze all settlement activity in the occupied West Bank, a minister close to Prime Minister Benjamin Netanyahu said.

“I want to say in a crystal clear manner that the current Israeli government will not accept in any fashion that legal settlement activity in Judea and Samaria be frozen,” said Transport Minister Yisrael Katz, using the Israeli term for the West Bank.

“The government will defend the vital interests of the state of Israel,” he told army radio.

It was the first high-level reaction to a call by President Barack Obama on Thursday during a meeting with Palestinian counterpart Mahmud Abbas that Israel stop settlement activity, a key obstacle in the hobbled Middle East peace talks.

Although the international community considers all Israeli settlements illegal, Israel makes a distinction between those the government authorised and so-called wildcat outposts, set up by zealous settlers without state approval.

Netanyahu has said his government would dismantle the outposts, but has argued that expansion of existing blocks should be allowed to continue.