"We heard from the U.S. that no matter what Israel is building in the West Bank, it will not affect a final status agreement to create a Palestinian state," said the PA official, who spoke on condition his name be withheld.
"The Americans told us (Prime Minister Benjamin) Netanyahu might construct in the West Bank for now but we (Palestinians) can enjoy these houses later. The evacuated homes will not be destroyed like some were when Israel pulled out of Gaza," the official said.
The official said Obama has adopted the position of PA Prime Minister Salam Fayyad, who presented a plan to create a Palestinian state within two years based largely on the 1967 borders, meaning Israel would retreat from the West Bank and eastern sections of Jerusalem.
The official, however, said the U.S. does not support Israel retaining the E1 area in Jerusalem, referring to Maale Adumim, a Jewish community in eastern Jerusalem.
The issue of Jewish construction is contentious. Obama has demanded Israel halt all settlement activity, or Jewish building projects in the West Bank and eastern Jerusalem.
Obama's Mideast envoy, George Mitchell, is in the region attempting to negotiate a settlement freeze. Talks between Netanyahu and Mitchell, which continued today, failed to reach an agreement. A deal could allow for a tripartite meeting between Obama, Netanyahu, and Palestinian President Mahmoud Abbas on the sidelines of the U.N. General Assembly next week.