The United States on Wednesday denied an Israeli report that it had agreed to the continued construction of 2,500 housing units in West Bank settlements.

"That report in that Israeli media outlet is inaccurate," State Department spokesman Ian Kelly said after Israel's Maariv daily reported that Israeli Defense Minister Ehud Barak and US President Barrack Obama's special envoy for the Middle East George Mitchell had struck such a deal in their London talks on Monday.

"Our bottom line is the same. It has not changed. And that's that all parties in the region have to honor their obligations. And you know what our position is regarding settlements. This activity has to stop," Kelly told reporters.

The Jewish settlement activities have been one of the key factors obstructing peace talks between Israel and the Palestinian National Authority (PNA).

Israel's government led by Prime Minister Benjamin Netanyahu, who took office in early April, rejects American calls to freeze the settlement activities, thus making ties between Israel and the United States unprecedentedly flagging.

(Xinhua News Agency July 9, 2009)