JERUSALEM, July 8 (JTA) — Despite mounting pressures to reach an agreement with the Palestinians, the Israeli government appears undecided how to proceed. Israeli Prime Minister Benjamin Netanyahu told his Inner Security Cabinet on Wednesday what most observers have already surmised — that Israel is still at odds with an American proposal under which Israel would withdraw from an additional 13 percent of the West Bank as part of a package to advance the long- deadlocked negotiations. Netanyahu met with his top three ministers in the wake of repeated telephone conversations with U.S. Secretary of State Madeleine Albright this week. Albright has spoken to Netanyahu seven times in the past few days in an effort the State Department is characterizing as “intensive end-game negotiations.” Albright also spoke to Palestinian Authority Chairman Yasser Arafat on Wednesday, according to Jamie Rubin, the State Department spokesman. “We think it’s extremely important that a decision be made and that it be made as soon as possible,” Rubin said, adding, “That is why we are working so hard on this.” In place of the American proposal, Netanyahu reportedly insists on a gradual and limited withdrawal. According to reports, Netanyahu appears willing to offer the Palestinians an immediate withdrawal from an additional 9 percent of those portions of the West Bank that are now under full Israeli control. These areas would fall under Palestinian civilian control, but Israel would maintain overall security control. Under this reported plan, Israel would cede 1 percent of additional territory to full Palestinian control. In the remaining 3 percent, Israel and the Palestinian Authority would share powers, similar to the arrangement reached last year in Hebron. Netanyahu told the three ministers that U.S. officials reject several Israeli demands: * the reconvening of the Palestine National Council to revoke those portions of the Palestinian Covenant calling for the destruction of Israel; * the extradition to Israel by the Palestinians of 33 wanted terrorists; and * limiting the scope of a third further redeployment. Two members of the Inner Security Cabinet — Defense Minister Yitzhak Mordechai and Trade Minister Natan Sharansky — called on the premier this week to reach a decision as soon as possible on how to advance the peace process. The other member, Infrastructure Minister Ariel Sharon, has said Israel should hand over no more than an additional 9 percent. Meanwhile, the premier faces additional pressures from other members of his Cabinet. Interior Security Minister Avigdor Kahalani of The Third Way Party repeated Wednesday his demand that Netanyahu make up his mind by July 31. Otherwise, Kahalani warned, he would convene the members of his party to decide whether to remain in the coalition. Although Netanyahu said earlier this week that a decision was close, he refused Wednesday to set a deadline for bringing a specific proposal up for Cabinet approval.