Occupied Jerusalem: Israel has objected to a US suggestion that Washington could with hold funding because of a deadlock in peace negotiations with the Palestinians.
Prime Minister Benjamin Netanyahu's office blames the Palestinians for the negotiations impasse.
US envoy George Mitchell was asked in an interview what sort of pressure could be applied to Israel to pressure it to make concessions in negotiations.
Mitchell said the US could "withhold support on loan guarantees to Israel."
Israel has received billions of dollars in guarantees, which are US-backed loans with favourable interest rates.
The US has cut them in the past over West Bank separation barrier construction.
