In a major policy shift influenced by the ongoing nuclear talks with Iran, Israeli Prime Minister Benjamin Netanyahu forced Housing Minister Uri Ariel to scrap plans for a "record" 20,000 Jewish settlement homes in the West Bank.

The move is viewed by experts as an effort to scupper an Iranian nuclear deal. Israeli move to create new settlement, which the Palestinians warned would destroy the peace process, had drawn international condemnation.

Sign posts are seen in front of the West Bank Jewish settlement of Maale Adumim near Jerusalem November 13, 2013. Palestinian President Mahmoud Abbas said on Wednesday his peace negotiators had resigned over the lack of progress in U.S.-brokered statehood talks clouded by Israeli settlement building. (REUTERS/Ammar Awad)

Following the move, Israeli Intelligence Minister Yuval Steinitz said all future settlement plans should be "coordinated" with the premier. Experts believe the statement is meant to be a cautionary remark directed at Housing Minister Ariel.

Netanyahu apparently told his hosing minister the plan to create 20,000 settlement homes that "create an unnecessary confrontation with the international community at a time when we are making an effort to persuade elements in the international community to reach a better deal with Iran."

"At this time, the attention of the international community must not be diverted from the main effort -- preventing Iran from receiving an agreement that will allow it to continue its military nuclear program," he said.

Israel's Science and Technology Minister Yaakov Peri agreed that the plans to create the settler houses weakened the country position on Iran.

"An announcement like that... undermines not only the peace talks that are running into trouble already, but also the prime minister's efforts regarding the Iranian issue," Peri is reported to have told public radio.

Prime Minister Netanyahu's move to scrap the settlement project came on the day when the country's newly reappointed Foreign Minister Avigdor Lieberman vowed to restore soured relations with the U.S., spoiled over the latter's effort to foster dialogue on Iran's nuke issue.

Israel has been opposing a potential nuclear deal with Iran, labeling it as a "bad" deal and warned the country would not shy away from striking Iranian nuclear facilities by itself if it felt military action is necessary to scuttle the country's nuclear program.