The incident occurred amidst widespread Israeli-Palestinian clashes over the Al-Aqsa Mosque compound, East Jerusalem's most contested site.
The State Department report downplays continued anti-Israeli incitement, proclaiming, "While some PA leaders have made provocative and inflammatory comments, the PA has made progress in reducing official rhetoric that could be considered incitement to violence".
Israel will not remove metal detectors whose installation outside a major Jerusalem mosque has triggered the bloodiest confrontations with the Palestinians in years, but could eventually reduce their use.
Israeli security forces said they had arrested 25 men active in Hamas.
Oren said Abbas' declaration may serve a political need but it "cuts off the limb on which he sits".
One security session was expected to discuss the recent implementation of metal detectors at entrances to a key holy site in the Old City. In a statement released on Sunday morning, the Islamic authorities in Jerusalem rejected the imposition of any new security measures at all at the site.
Aboul Gheit said all the recent Israeli measures in al-Aqsa Mosque compound indicate that Israel is attempting to enforce new facts and change the status quo in the Old City, something that is unacceptable and is a red line that Israel should not bypass.
Clashes also erupted at the Qalandia checkpoint, the main Palestinian passageway between Ramallah and Jerusalem, where Israeli security forces fired rubber bullets and tear gas to disperse the crowds.
Police Superintendent and spokesman Micky Rosenfeld said on Twitter, "Names of three Israelis murdered in Friday night attack by Palestinian terrorist, Yosef Solomon age 70, Chaya Solomon age 46, Elad Solomon age 36". The elder Solomon's daughter-in-law escaped to a separate room to shelter her young children.
Israeli Prime Minister Benjamin Netanyahu has denounced the attack on the Israeli family as "an act of terror, carried out by an animal who was incited with unfathomable hatred".
Netanyahu was also holding a cabinet meeting and was due to meet his security cabinet later.
Abbas has said the freeze would remain in effect until the metal detectors have been removed.
Israeli officials argue that the detectors are needed for security after the gun attack outside the mosque. Ending those ties could quickly escalate tensions. "We only take deliberately examined decisions that we hope to make a result", Abbas added.
Israel erected the screening devices after two policemen were shot dead by Arab assailants in the mosque vicinity. And they encouraged Israel and Jordan to work together to uphold it. On Friday, thousands marched in the capital Amman in an anti-Israel protest. The Halamish settlement is located in the West Bank.