But US State Department spokesman Ian Kelly said the report was "inaccurate" and that Washington stood by its position that all settlement activity must end as outlined in the peace process with Palestinians.
"This activity has to stop. This is laid out in the road map" peace plan, Kelly said. "So the reports are inaccurate."
Israeli plans to build more settlements has frustrated Washington, which sees them as an obstacle to restarting peace negotiations with the Palestinians.
Ma'ariv reported the compromise was reached during a meeting in London on Monday between Israeli Defense Minister Ehud Barak and US President Barack Obama's special envoy to the Middle East, George Mitchell.
Obama has repeatedly called on Israeli Prime Minister Benjamin Netanyahu to stop building settlements.
"Our bottom line is the same. It has not changed," Kelly said. "And that's that all parties in the region have to honor their obligations."
Mitchell is to meet with Netanyahu in Israel next week.
Tags: Israel, source: Earth Times, US, Ya Libnan
