Jerusalem - Israel has conveyed its displeasure to Washington over reported remarks by US Consul General Jacob Walles that it had agreed to start negotiations with the Palestinians over Jerusalem, an Israeli newspaper reported Friday.

The Jerusalem Post quoted an Israeli government source as saying Walles's comments to the Palestinian daily al-Ayyam were "highly inappropriate," since there was a US-Palestinian-Israeli agreement not to go public with what was being discussed by the negotiators.

Walles told al-Ayyam the parties had agreed to negotiate borders on the basis of the 1967 lines, which includes also East Jerusalem. During the 1967 Arab-Israeli war, Israel captured the West Bank and East Jerualem from Jordan, and the Gaza Strip from Egypt.

State Department Spokesman Sean McCormack issued a clarification Thursday, saying the US government "has not taken a position" on the issue of borders.

Israeli government spokesman Mark Regev told Deutsche Presse-Agentur dpa Thurday that the highly-sensitive issue of Jerusalem had as yet not been brought up since Israeli-Palestinian peace talks were revived nine months ago, but that Israel was willing to negotiate Jerusalem.

A senior U. S. official who participated in the discussions however denied that the Israeli side had been willing to negotiate concerning Jerusalem.

US Secretary of State Condoleezza Rice had participated in the negotiations in a way that respected the Israeli position, the official clarified.

Israel has wanted to postpone a settlement on Jerusalem and instead reach an agreement that solves other key issues to meet an end-of-year deadline. The Palestinians have rejected the proposal and said they were backed by Rice that Jerusalem should be on the negotiating table. (dpa)