The New Zealand government is denying it was pressured by Israel not to launch a new initiative on the Middle East in the United Nations Security Council.
But it admits the matter was discussed with Israel at diplomatic level and Israel's opposition would have been conveyed to New Zealand.
Two Israeli newspapers concur with this view.
The intitiative has just been prepared by New Zealand, a week after the Foreign Minister Murray McCully argued strongly in favour of one in an address to the Security Council.
If the New Zealand proposal gets voted on, it will be the first time the Security Council has voted on the Middle East in six years.
The two-page draft calls for Israel to stop building settlements in occupied territories and for Palestinians to refrain from taking cases to the International Criminal Court.
It also asks both parties to avoid provocative acts and not to demonise the other side.
New Zealand's draft Security Council resolution calling for an end to the Israeli-Palestinian conflict was branded 'destructive' by Israel's UN ambassador, Danny Danon.
The resolution, which Mr Danon rejects, calls on both sides to 'rebuild confidence and prepare for the resumption of negotiations'.
It was decried as bland by the Jerusalem Post, which said it was likely to fail.
The paper said Israel was traditionally hostile to involving other actors - particularly the UN - in the ongoing conflict.
The New Zealand proposal was like a Christmas tree, it said, on which other Security Council members would hang their own ideas, until it morphed into a monster.
France recently proposed a more prescriptive resolution, which called for a deadline to be set for the end of the talks, and for a Palestinian state to be established along the pre-1967 lines, with east Jerusalem as its capital.
In comments to reporters, New Zealand U.N. Ambassador Gerard van Bohemen said there was a worrying deterioration in conditions in the Middle East, and nothing was happening in the peace process.
His comments came amid a wave of knife and gun violence in and around Jerusalem.
Meetings between Israel and New Zealand
Media reports said as the draft was being prepared, the New Zealand ambassador was called into the Israeli Foreign Ministry to protest.
However, the New Zealand government said ambassador Jonathan Curr, who resides in Turkey, was on a routine visit anyway.
He did meet senior Israeli officials and was told of their opposition to a UN resolution, it said.
Both the Jerusalem Post and the newspaper Haaretz concurred that New Zealand was told of Isael's dislike of the initiative.
Israel has long argued that direct negotiations, not UN initiatives, are the best way to bring peace.
But Mr McCully believes the current situation in the Middle East is unsustainable and progress needs to be made soon.