diff --git a/src/net/java/sip/communicator/impl/protocol/jabber/CallPeerJabberImpl.java b/src/net/java/sip/communicator/impl/protocol/jabber/CallPeerJabberImpl.java
index 488473802..e40622dbb 100644
--- a/src/net/java/sip/communicator/impl/protocol/jabber/CallPeerJabberImpl.java
+++ b/src/net/java/sip/communicator/impl/protocol/jabber/CallPeerJabberImpl.java
@@ -403,18 +403,19 @@ public void putOnHold(boolean onHold)
         CallPeerMediaHandlerJabberImpl mediaHandler = getMediaHandler();
 
         mediaHandler.setLocallyOnHold(onHold);
-        /*
-        try
-        {
-            JinglePacketFactory.createSessionInfo(from, to, sid, type)
-        }
-        catch (Exception ex)
-        {
-            ProtocolProviderServiceJabberImpl.throwOperationFailedException(
-                "Failed to create SDP offer to hold.",
-                OperationFailedException.INTERNAL_ERROR, ex, logger);
-        }
-        */
+
+        SessionInfoType type;
+
+        if(onHold)
+            type = SessionInfoType.hold;
+        else
+            type = SessionInfoType.unhold;
+
+        JinglePacketFactory.createSessionInfo(
+                        getProtocolProvider().getOurJID(),
+                        peerJID,
+                        getJingleSID(),
+                        type);
 
         reevalLocalHoldStatus();
     }
@@ -452,4 +453,25 @@ public boolean isInitiator()
     {
         return isInitiator;
     }
+
+    /**
+     * Handles the specified session <tt>info</tt> packet according to its
+     * content.
+     *
+     * @param info the {@link SessionInfoPacketExtension} that we just received.
+     */
+    public void processSessionInfo(SessionInfoPacketExtension info)
+    {
+        if( info.getType() == SessionInfoType.ringing)
+            setState(CallPeerState.ALERTING_REMOTE_SIDE);
+        if (info.getType() == SessionInfoType.hold)
+        {
+            getMediaHandler().setRemotelyOnHold(true);
+        }
+        else if (info.getType() == SessionInfoType.unhold
+                 || info.getType() == SessionInfoType.active)
+        {
+            getMediaHandler().setRemotelyOnHold(true);
+        }
+    }
 }
diff --git a/src/net/java/sip/communicator/impl/protocol/jabber/CallPeerMediaHandlerJabberImpl.java b/src/net/java/sip/communicator/impl/protocol/jabber/CallPeerMediaHandlerJabberImpl.java
index a27e0978b..a686f929c 100644
--- a/src/net/java/sip/communicator/impl/protocol/jabber/CallPeerMediaHandlerJabberImpl.java
+++ b/src/net/java/sip/communicator/impl/protocol/jabber/CallPeerMediaHandlerJabberImpl.java
@@ -56,6 +56,11 @@ public class CallPeerMediaHandlerJabberImpl
     private Map<String, ContentPacketExtension> remoteContentMap
         = new LinkedHashMap<String, ContentPacketExtension>();
 
+    /**
+     * Indicates whether the remote party has placed us on hold.
+     */
+    private boolean remotelyOnHold = false;
+
     /**
      * Creates a new handler that will be managing media streams for
      * <tt>peer</tt>.
@@ -466,6 +471,53 @@ public void processAnswer(List<ContentPacketExtension> answer)
         }
     }
 
+    /**
+     * Acts upon a notification received from the remote party indicating that
+     * they've put us on/off hold.
+     *
+     * @param onHold <tt>true</tt> if the remote party has put us on hold
+     * and <tt>false</tt> if they've just put us off hold.
+     */
+    public void setRemotelyOnHold(boolean onHold)
+    {
+        this.remotelyOnHold = onHold;
+        MediaStream audioStream = getStream(MediaType.AUDIO);
+        MediaStream videoStream = getStream(MediaType.VIDEO);
+
+        if(remotelyOnHold)
+        {
+            if(audioStream != null)
+            {
+                audioStream.setDirection(audioStream.getDirection()
+                            .and(MediaDirection.RECVONLY));
+                audioStream.setMute(remotelyOnHold);
+            }
+            if(videoStream != null)
+            {
+                videoStream.setDirection(videoStream.getDirection()
+                            .and(MediaDirection.RECVONLY));
+                videoStream.setMute(remotelyOnHold);
+            }
+        }
+        else
+        {
+            //off hold - make sure that we re-enable sending
+            if(audioStream != null)
+            {
+                audioStream.setDirection(audioStream.getDirection()
+                            .or(MediaDirection.RECVONLY));
+                audioStream.setMute(remotelyOnHold);
+            }
+            if(videoStream != null
+                && videoStream.getDirection() != MediaDirection.INACTIVE)
+            {
+                videoStream.setDirection(videoStream.getDirection()
+                            .or(MediaDirection.RECVONLY));
+                videoStream.setMute(remotelyOnHold);
+            }
+        }
+    }
+
     /**
      * Returns the transport manager that is handling our address management.
      *
diff --git a/src/net/java/sip/communicator/impl/protocol/jabber/OperationSetBasicTelephonyJabberImpl.java b/src/net/java/sip/communicator/impl/protocol/jabber/OperationSetBasicTelephonyJabberImpl.java
index 0d0755056..37a89f000 100644
--- a/src/net/java/sip/communicator/impl/protocol/jabber/OperationSetBasicTelephonyJabberImpl.java
+++ b/src/net/java/sip/communicator/impl/protocol/jabber/OperationSetBasicTelephonyJabberImpl.java
@@ -291,7 +291,9 @@ private void putOnHold(CallPeer peer, boolean on)
     @Override
     public void setMute(Call call, boolean mute)
     {
-        /** @todo implement putOnHold() */
+        CallJabberImpl jabberCall = (CallJabberImpl)call;
+
+        jabberCall.setMute(mute);
     }
 
     /**
@@ -510,8 +512,7 @@ else if (action == JingleAction.SESSION_INFO)
                 return;
 
             // change status.
-            if( info.getType() == SessionInfoType.ringing)
-                callPeer.setState(CallPeerState.ALERTING_REMOTE_SIDE);
+            callPeer.processSessionInfo(info);
         }
     }
 
diff --git a/src/net/java/sip/communicator/impl/protocol/sip/OperationSetBasicTelephonySipImpl.java b/src/net/java/sip/communicator/impl/protocol/sip/OperationSetBasicTelephonySipImpl.java
index bde859912..2a4a7f145 100644
--- a/src/net/java/sip/communicator/impl/protocol/sip/OperationSetBasicTelephonySipImpl.java
+++ b/src/net/java/sip/communicator/impl/protocol/sip/OperationSetBasicTelephonySipImpl.java
@@ -1528,7 +1528,7 @@ public synchronized void shutdown()
      * and one of the possible approaches to it is sending silence.
      * </p>
      *
-     * @param call the <tt>Call</tt> whos mute state is set
+     * @param call the <tt>Call</tt> whose mute state is set
      * @param mute <tt>true</tt> to mute the call streams being sent to
      *            <tt>peers</tt>; otherwise, <tt>false</tt>
      */
diff --git a/src/net/java/sip/communicator/service/protocol/AbstractCallPeer.java b/src/net/java/sip/communicator/service/protocol/AbstractCallPeer.java
index 115df8a6a..1bbf11c6c 100644
--- a/src/net/java/sip/communicator/service/protocol/AbstractCallPeer.java
+++ b/src/net/java/sip/communicator/service/protocol/AbstractCallPeer.java
@@ -9,6 +9,7 @@
 import java.net.*;
 import java.util.*;
 
+import net.java.sip.communicator.impl.protocol.jabber.extensions.jingle.*;
 import net.java.sip.communicator.service.protocol.event.*;
 import net.java.sip.communicator.util.*;