“J Street is profoundly disappointed that the Israeli government has chosen this moment to announce yet another large round of construction in East Jerusalem,” the statement said.
The news coincided with a trip to the United States by Netanyahu, which included a meeting with U.S. Vice President Joe Biden. It was during a trip by Biden to Israel earlier in the year that a diplomatic row erupted between the allies over Israeli plans to build 1,600 new Jewish homes in another East Jerusalem neighborhood, Ramat Shlomo.
“The latest negotiations designed to end the Israeli-Palestinian conflict hang by a thread, and the United States is working tirelessly to find a way to keep hope for a diplomatic two-state resolution to the conflict alive,” the J Street statement said, adding that the news was even more disappointing “Netanyahu is in the U.S. this week, participating in important discussions with Vice President Biden and other American officials over how to resume peace talks and how to address the Iranian nuclear program.”
Earlier this year, Israel announced the construction of over 1,600 new houses for ultra-Orthodox families in East Jerusalem.
“I condemn the decision by the government of Israel to advance planning for new housing units in East Jerusalem,” Biden said, as the timing of the announcement was strongly criticized by both the left wing parties in Israel and the U.S. administration.
The American-Jewish lobby urged Israel to delay any further construction over the Green Line “until negotiations over the border have been finalized, in the interest of its long-term security and survival as a democracy and as the homeland of the Jewish people.”
Last month, over 120 leaders of Jewish organizations from around the world and important Jewish figures met in Jerusalem for a two-day conference for a meeting organized by the Jewish People Policy Planning Institute to deliberate the impact of the peace process and possible concessions to be expected and demanded a role in determining the fate of Jerusalem and other key issues in Mideast peace talks.
Participants in the conference were former presidential adviser Elliott Abrams; Malcolm Hoenlein of the Conference of Presidents of the Major American Jewish Organizations; former U.S. ambassador to Israel Daniel Kurtzer; the head of the Anti-Defamation League, Abraham Foxman; the senior vice president of Bna’i B’rith International, Daniel Mariaschin; Pierre Besnainou, a leading figure of the Jewish community in France; and others.

State Department Spokesman, J Street condemn plan to build 930 houses beyond the Green Line as Netanyahu makes official U.S. visit. By Natasha MozgovayaTags: Israel newsUSEast JerusalemJ StreetIsrael settlementThe United States said it was “deeply disappointed” on Monday by Israel’s announcement of a plan to build over 1,000 new Jewish homes beyond the Green Line in Jerusalem.

“We were deeply disappointed by the announcement of advance planning for new housing units in sensitive areas of East Jerusalem. It is counter-productive to our efforts to resume direct negotiations between the parties,” said U.S. State Department Spokesman Philip J. Crowley.
Israel’s announcement of its program which will allow some 1,300 new housing units to be built beyond the Green Line could prove to be an embarrassment to Prime Minister Benjamin Netanyahu, who is currently in the United States.
“We have long urged both parties to avoid actions which could undermine trust, including in Jerusalem, and will continue to work to resume direct negotiations to address this and other final-status issues,” Crowley said.
Ruth Yosef, who chairs the Jerusalem District Planning and Building Committee, published over the weekend details of a program that will allow 930 housing units to be built in the Har Homa C area, with another 48 units in Har Homa B. An additional 320 units are planned for Ramot, also beyond the Green Line.
The pro-Israel lobby J Street also issued a statement criticizing the new building permits, saying that “J Street is profoundly disappointed that the Israeli government has chosen this moment to announce yet another large round of construction in East Jerusalem.”
The American-Jewish lobby urged Israel to delay any further construction over the Green Line “until negotiations over the border have been finalized, in the interest of its long-term security and survival as a democracy and as the homeland of the Jewish people.”

He studied and worked in the United States, and his English is fluent; yet another strategic loss for Israel. There’s a rumor that on a recent visit, senior members of the New York Times editorial staff were more impressed by him than by his Israeli counterpart, and gave expression to this in an editorial calling on Netanyahu to stop his dangerous games.
With wise counsel shall Fayyad wage his war against us: He is building the Palestinian state from its foundations, stone by stone. His security forces are imposing law and order, suppressing terror, weakening Hamas. Monies sent to the Palestinian Authority no longer get lost on their way to their destination. Donors trust him because they see the results of their contributions.
Fayyad is gradually undermining and invalidating Israel’s traditional arguments: He has brought security, but there is still no peace. He meets PA President Mahmoud Abbas’ extremism with moderation. Dangerous he is: He will kill us with moderation.
And now he is casting an eye at Jerusalem, too; his scheming knows no bounds or fences. After mapping Israeli neglect precisely, he leaped into no man’s land. If Israel will not build and renovate the schools in East Jerusalem, then he will step in to fill the vacuum. If Israel neglects the roads and sidewalks despite repeated complaints, he orders them repaired and paved.
And as if that provocative and scandalous interference were not enough, he has the chutzpah to openly celebrate the completion of these works. That won’t do. Netanyahu and Mayor Nir Barkat and Public Security Minister Yitzhak Aharonovitch will head him off. Fayyad may spend money in our stead, but quietly. The right to noisy celebration is reserved for the Jewish settlers of Silwan and Sheikh Jarrah.
Our right to the entire city of Jerusalem has expired, and not only because half of it is Arab and has remained so despite all the cleansing and Judaization efforts. Our right expired because we never genuinely joined it together. Just the reverse: We divided and governed, stole and inherited, and even the new wall we stuck in its heart in order to divide it, Hallelujah.
One can argue about our historic right, but it is difficult to dispute our natural duty, which comes from above. Through our own stinginess and hardheartedness toward the eastern part of the city, which was never joined to the rest and became an open wound. Unified Jerusalem, a godless city.
Salam Fayyad can still be kept away from the center of the city, but Jerusalem itself can no longer be kept off the center of the agenda.

a Haaretz.com article

Israel must choose between either holy places and East Jerusalem, or peace and democracy.

During Israel’s 62nd Independence Day celebrations this week, Knesset Speaker Reuven Rivlin went out of his way to make clear that Israel does not intend to compromise on Jerusalem.

Rivlin was very outspoken, and said that Israel would not apologize for conquering various parts of Jerusalem, and for holding on to its sacred places.

In the background of the ceremony shined a huge projection showing the famous photograph in which Theodore Herzl looks out over the Rhine River at the occasion of the first Zionist congress in Basel.

With this image behind him, Rivlin spoke of how Israel must continue Herzl’s dream. He also spoke of the weakness of those who are willing to partition Jerusalem, calling those who support such a move ‘galuti’ – the stereotype of the cringing Diaspora Jew who tries to please the gentiles, in contrast with manly patriotism.

I wonder when Rivlin last read Herzl. So let’s first get the history clear. Herzl’s overriding goal was to solve what was at him time called the ‘Jewish Question’.

Herzl wanted Jews to have a sovereign state of their own. As opposed to Rivlin, Herzl very much believed in diplomacy and his impact on the Zionist movement was primarily a combination of his visionary and diplomatic abilities. Herzl also set a constructive and cooperative relationship between Jews and Arabs as a centerpiece in his depiction of the new Jewish state in his novel ‘Altneuland’.

Herzl believed that Israel needed to adhere to the ideal of liberal democracy and dreamt of the future Jewish state as a progressive country; his vision was forward-looking rather than preoccupied with symbols of the past.

Rivlin is basically a believer in democracy; I have no doubt about that. He invited those who do not identify with the Zionist dream to be part of the country. For some reason, Rivlin found it inappropriate to simply name these invitees as Israeli Arabs ? though it was obvious to whom he was referring.

Rivlin is trying to have it both ways. He doesn’t see that it is impossible to have your cake and eat it, too. It will be either democracy or the settlements; either peace or East Jerusalem.

That much Rivlin could have gathered from listening to Defense Minister Barak, who, in ceremonies leading up to Yom Ha’atzmaut repeated time and again that the occupation must stop, that we must choose between the settlements and Israel as both a Jewish and a democratic state. But maybe Barak is too galuti for Rivlin?s taste, too – even though he is the most decorated officer in the history of the Israel Defense Forces.

Rivlin repeated the mantra that Jerusalem will never again be partitioned. But he is just perpetuating a myth: Jerusalem is partitioned de facto. Rivlin says that Jews and Arabs shouldn’t live in segregated neighborhoods. Does he mean that Palestinians should be evicted from their homes in Sheikh Jarrah in favor of settlers? Is that the type of coexistence that he advocates? Does he seriously think that this is what will make Arabs identify with the State of Israel?

The background of all these declarations is, of course, the open conflict with the Obama administration, and the right-wingers both in Israel and the U.S. who accused the president of perpetuating this conflict.

Before Obama entered office, they say, Israel and the U.S. saw things the same way; there was harmony, and Israel could do as it pleased.

This view is incredibly short-sighted: the international community – including the U.S. – long ago made up its mind that the two-state solution needs to be implemented. It has never accepted Israel’s annexation of East Jerusalem, and even George W. Bush – who Netanyahu and Rivlin miss sorely – would not move the U.S. embassy from Jerusalem to Tel Aviv. And it was during the Bush Administration that two leading political scientists, Walt and Mearsheimer, questioned unconditional U.S. support of Israeli policies and argued it to be against U.S. interests.

Netanyahu’s repeated assertions that he really knows the U.S., and that when push comes to shove the U.S. will unconditionally stand behind Israel no matter what it does, is quite simply wrong.

Rivlin’s declaration that Israel needs to be strong and stick to its values is simple-minded, because two of these values conflict. Israel will have to choose between the holy places and East Jerusalem on the one hand, and peace and democracy on the other hand. Rivlin will have to choose between Herzl and the Zionist revisionist Ze’ev Jabotinsky. Herzl believed in cooperation; he believed in multiculturalism long before the word was even invented. And yes, Herzl believed in diplomacy: He didn’t think that the Jewish state should or could be in constant confrontation with its environment.

Jabotinsky believed in power. He thought that indeed Jews needed to become ‘manly’; that Jews needed to learn reliance on guns rather than on diplomacy. It is true: Jabotinsky was torn between militarism and a strong liberal streak in his mental outfit. So, I believe, is Reuven Rivlin; I have no doubt that he wants Israel to be a true democracy. But, like Jabotinsky, when the moment of truth comes, Rivlin’s nationalist streak wins over his belief in liberal democracy.

I believe that most Jews around the globe are deeply committed to democracy. Recent polls show that most U.S. Jews continue to support Obama, including his policies towards Israel. They do so, because they think that in the long run, Israel’s existence as a Jewish and democratic state depends on implementing the two-state solution, and they know that time is running out.

I call upon the rather silent majority of liberal U.S. Jewry not to be afraid any longer to speak its mind. Don’t let the vocal minority of the right tell you that you need to choose between being pro-Israel or pro-peace. J Street is right: you can be both. And don’t forget that Herzl’s vision is on your side and not on that of the right.

The holidays are over and Prime Minister Benjamin Netanyahu has a problem. He has to respond to U.S. President Barack Obama’s ultimatum, the gist of which is the demand to freeze construction in East Jerusalem and the numbers of Jews moving there. Netanyahu would have been glad to dismiss Obama’s demands, but he understands that he can’t, so he’s waging a PR campaign in the United States to soften the administration’s position.

Netanyahu has been saying for many years now that the president is not an autocrat and that American foreign policy is influenced by Congress, public opinion, the media and think tanks. Now his theory is being put to the test. Over the past three weeks the administration has been flooded with letters by U.S. representatives and senators, ads of support by Ron Lauder and Elie Wiesel, editorials and columns, television interviews with the prime minister and e-mails from Jewish supporters of Israel. They all warn, at various levels of bluntness and harshness, that Obama is abandoning Israel in the face of threats from Iran’s nuclear program and Palestinian terror.

Obama’s pressures have called Netanyahu’s bluff: It’s not Iran that is Netanyahu’s top priority, as he claimed before he was elected, but rather the East Jerusalem neighborhood of Sheikh Jarrah. The fact is, the prime minister did not call on Elie Wiesel and members of congress to warn against the “second Holocaust” that Mahmoud Ahmadinejad is plotting, but to prevent construction plans at the Shepherd Hotel, Silwan and Ramat Shlomo from shutting down, which would cost the prime minister his right-wing coalition.
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From Netanyahu’s point of view, Obama misled him. The prime minister wanted only one thing: not to come out looking like a sucker. To him, statecraft consists of give and take, of “if they give they’ll get,” while Obama wants only to take – he opposes a surprise attack on Iran’s nuclear facilities and is hardening his demands on the Palestinian issue. It started with the acceptance of the two-state principle, continued with a construction freeze in the settlements, and has now arrived in East Jerusalem, in the shadow of a threat to force a solution that will take Israel out of the West Bank and to the 1967 lines.

Netanyahu is coming out a super-sucker: He gave and gave and got nothing. Netanyahu expected that in return for his gestures to the Palestinians, Obama would harden his position on Iran and come closer to the threshold of conflict (“paralyzing sanctions”). But the president is not playing along. His feeble moves signal that the Americans are coming to terms with the Iranian nuclear program. Instead of pressuring Ahmadinejad and Supreme Leader Ali Khamenei, he is pressuring Netanyahu to get out of the territories and hinting that Israel might embroil America in a very bloody and costly war.

Obama-haters are using Israel to goad the president for “hurting allies,” and this is driving the White House even crazier. Netanyahu is torn between his political supporters at home and in the United States who are pushing him toward a direct conflict with a hostile administration, and his understanding that the rainy day will come when Israel needs Obama’s help.

But Netanyahu’s problem is much deeper and more serious than the coalition’s makeup. Replacing Shas, Yisrael Beiteinu and Habayit Hayehudi with Tzipi Livni would soften Israel’s aggressive tone toward “the world” but not really change the situation. No Israeli government would risk rockets on Tel Aviv, a civil war with the settlers and a political rupture in the Israel Defense Forces just to satisfy Obama.

An Israel that is preparing for conflict with Iran and that does not trust American support will not move an inch in the territories. Netanyahu and Defense Minister Ehud Barak will try to wear Obama and his people out with empty discussions until a decision is made on whether to go to war. Netanyahu and Barak know that the extent of Israel’s concessions in the territories will determine the extent of American help in stopping the Iranian nuclear program. Itamar in exchange for Natanz.

Netanyahu managed to rouse public discourse in the United States about Israel, and Obama got the message. His statement on Independence Day was enthusiastic and warm, speaking about Israel as the historic homeland of the Jewish people and assuring continued efforts to work for a two-state solution and “to counter the forces that threaten Israel, the United States, and the world” (that is, Iran). Now that the fireworks are over, it will become clear whether the president’s message was mere lip service to quiet the criticism at home, or whether it signals intent to forge a deal with Netanyahu.

The unspoken message that the Obama administration appeared to send Israeli Prime Minister Benjamin Netanyahu

last week is this: Stop behaving like an ungrateful friend.

Ever since Netanyahu’s government blindsided Vice President Biden during his recent visit to the Jewish state with an announcement that it will build 1,600 housing units in East Jerusalem, the Obama administration has been smarting.

And for good reason.

Of all the hurdles to an enduring peace deal between Israel and the Palestinians, the fate of Jerusalem— which both claim as their capital — is the most daunting. Every time Israel breaks ground on more housing there, the peace lamps flicker.

Reeling from Israel’s announcement, the Obama administration urged Netanyahu to rescind the decision. In a phone call, Secretary of State Hillary Clinton told the prime minister that the new construction was “a deeply negative signal” about Israel’s relationship with the United States. The Israeli government “needed to demonstrate not just through words but through specific actions” its commitment to that relationship and the peace process, Clinton said, according to State Department spokesman P. J. Crowley.

But in a speech last week in Washington to the American Israel Public Affairs Committee, Netanyahu thumbed his nose at these concerns. “Jerusalem is not a settlement; it’s our capital,” he proclaimed.

Israel’s benefactor

The United States is Israel’s oldest and closest friend. And since its creation in 1948, Israel has been the largest cumulative recipient of American foreign aid. In addition to now receiving nearly $3 billion annually in grants from this country, Israel has gotten billions of dollars worth of loan guarantees since 1972 to help build housing and shore up its economy.

While Israel is forbidden from using any of this money to construct housing in its occupied territory, the largesse frees Israel to use other parts of its budget to fund such projects. Not to mention that without U.S. military assistance, Israel would struggle to fend off its enemies.

A costly commitment

Our support of Israel is costly in non-monetary ways, too.

“The enduring hostilities between Israel and some of its neighbors present distinct challenges to our ability to advance our interests” in that part of the world, Gen. David Petraeus, the commander of U.S. forces in Afghanistan and Iraq, told the Senate Armed Services Committee this month. “Arab anger over the Palestinian question” hurts this country’s relationship with other governments in the region and “weakens the legitimacy” of moderate Arab leaders, he said.

And while unemployment in Israel dropped to 7.4% in the last quarter of 2009, joblessness during that period in the U.S. hovered around 10%.

The investment of treasure, and as Petraeus hinted, perhaps U.S. blood, on behalf of Israel should evoke deep gratitude. Instead, Netanyahu’s government takes a go-it-alone approach when it serves Israel’s interest — the rest of the world be damned.

The United States is right to champion Israel’s right to exist, of course, and to provide an umbrella of protection to help ensure the Jewish state’s survival. But the Netanyahu government strains this longstanding friendship when it pursues a course of action that unnecessarily inflames passions in the Arab world and weakens the ability of moderate Arab leaders to talk peace.

In a comparatively rare public complaint, Saudi Arabia lashed out Wednesday at Israeli government policy, asking major powers involved in Middle East peace-making for “clarifications about Israel’s arrogant policy and its insistence on defying international will.”

Israel has been under fire repeatedly in recent weeks, for its alleged role in the killing of a senior Hamas official in Dubai in January, as well as for its continued construction of Jewish homes in East Jerusalem.

The former incident resulted in the expulsion Tuesday of an Israeli diplomat from Britain, over the use of forged British passports by the apparent killers of Mahmoud al-Mabhouh, widely believed in the international community to be agents of Israel’s Mossad. Meanwhile, the announcement of new building in East Jerusalem on the day that U.S. Vice President Joe Biden arrived in Israel this month sparked fury in Washington, which vocally expressed its annoyance.

U.S. President Barack Obama held a one-on-one meeting with Prime Minister Benjamin Netanyahu at the White House on Tuesday as Israel sought to smooth over the diplomatic spat with Washington.

Efforts to restore ties may have hit a roadblock, however, with the approval Tuesday of a further 20 East Jerusalem homes beyond the Green Line at the site of the former Shepherd Hotel.

The two leaders met for around 90 minutes. The White House had no immediate comment on what they discussed.

At the end of the meeting, Obama departed to his living quarters at the White House, while Netanyahu met with his advisers for over an hour in the Roosevelt Room. Netanyahu then requested another meeting with the U.S. president, and the two spoke again, one-on-one, for a half an hour.

“President Obama and the prime minister met privately for an hour and a half, the atmosphere was good,” Netanyahu spokesman Nir Chefetz said in a statement several hours after the meeting ended.

He said the two leaders’ advisers “continued discussions on the ideas raised at the meeting” and would hold further talks on Wednesday.

In spite of attempts on both the Israeli and American sides to bring the crisis to an end, there is still lingering tension and lack of trust within the Obama administration toward Netanyahu.

An American source close to the administration said that Obama and Secretary of State Hillary Clinton have decided to “test” Netanyahu and see whether he will carry out his promised gestures of good will toward the Palestinians.

According to an Israeli source who has discussed the matter with senior U.S. officials, Secretary of State Hillary Clinton and the president are dissatisfied with a letter given to them by Netanyahu, in which he detailed steps he is willing to take to restore American confidence in his government.

The prime minister and his aides said that a meeting with Clinton and Vice President Joe Biden on Monday, which served as a preamble to the meeting with Obama, was conducted in excellent spirits.

Israel had angered Biden by announcing plans for 1,600 new Jewish homes in east Jerusalem during his visit to the country two weeks ago.

An Israeli source noted that both Biden and Clinton used strong language and made it clear to Netanyahu that he would need to make further concessions to American demands in their meeting if trust is to be restored.

The same source said that the Americans are convinced that the answers Netanyahu had given them are insufficient.

Washington officials have also been irritated by Netanyahu’s attempts to draw equivalency between building inside Israel’s internationally recognized borders and in east Jerusalem.

“I think at one point the prime minister added that he did not see a distinction necessarily between building in Jerusalem and building in Tel Aviv. We disagree with that,” a White House spokesman said ahead of the meeting.

In a sign of White House concerns about lingering tensions, press coverage of the Oval Office talks was barred and no public statements were planned.

Before seeing Obama, Netanyahu told U.S. lawmakers he feared peace talks may be delayed for another year unless Palestinians drop their demand for a full freeze on Jewish building beyond the Green Line, including in east Jerusalem.

“We must not be trapped by an illogical and unreasonable demand,” Netanyahu said during his meeting with House of Representatives Speaker Nancy Pelosi and other congressional leaders, according to his spokesman.

“It could put the peace negotiations on hold for another year,” he said of the talks, suspended since December 2008.

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Saudi Arabia: World must intervene with ‘arrogant’ Israel

Israel has given final approval for 20 new settler homes in East Jerusalem, in a move that further complicates efforts to ease tensions with the United States.

The announcement was made late Tuesday as Israeli Prime Minister Benjamin Netanyahu met with U.S. President Barack Obama at the White House to resolve the dispute over Israel’s construction plans in East Jerusalem.

The White House made no statement afterward and kept photographers away from the talks, an unusual step for a visit of a key U.S. ally. Advisers of both leaders were to continue discussions Wednesday.

The Obama administration condemned Israel earlier this month for announcing plans to build 1,600 homes for Jews in East Jerusalem, which is claimed by Palestinians as a future capital.

Israeli officials on Wednesday downplayed the latest announcement to build 20 apartments at the site of an old hotel, calling the move a procedural step in a project that technically was approved last year.

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Israel Continues Settlement Expansion in East Jerusalem

If the Israeli government thought it had weathered the storm over the Biden debacle as the US vice-president left the region, it was wrong.

The dressing-down from Israel’s closest ally over the approval of plans for new homes in East Jerusalem during the US vice president’s visit continued in full force over the weekend.

US Secretary of State Hillary Clinton said it was “insulting”. An aide to US President Barack Obama, David Axelrod, dubbed it “an affront” and a “calculated” attempt to undermine the expected launch of indirect talks.

Israel’s ambassador to the US has reportedly said relations between Israel and its closest ally are at a 35-year low.

To some in Israel, currently battling what many here see as a wave of international hostility evidenced by the Goldstone report accusing it of war crimes in Gaza, angering its strongest ally and greatest friend on the world stage is major worry.

Indeed, mismanaging the critical relationship in the late 1990s is one of the criticisms of Mr Netanyahu.

“Who’s the superpower here?”, Mrs Clinton’s husband Bill is said to have asked, when Mr Netanyahu launched into a long political lecture during their first meeting.

‘Serious concern’

But equally, there are those who think the Obama administration has pushed it too far.

Aipac, the powerful pro-Israel lobby group in the US, said recent US statements were a matter of “serious concern” – and the US should “take immediate steps to defuse the tension” – in other words, it should back off.

Most commentators here think it’s a little overblown to say relations are at a three-decade low.

US President Ronald Reagan’s early years in office – during which Israel invaded Lebanon and bombed Iraq’s nuclear reactor, and the US sold air defences to Saudi Arabia – were very rocky, they point out, as was 1991 when George Bush Senior’s government denied loan guarantees to Israel – again over disagreements on settlement in the West Bank.

But, the crisis is still “deep and a cause for concern”, says Oded Eran, head of the Institute for National Security Studies and a seasoned Israeli diplomat who has served as former deputy chief of Israel’s embassy in the US.

One of the reasons, he says, is that it comes on top of background tension and real political differences between the two sides.

The tone of US-Israel ties has changed since early last year, when the Democrat Barack Obama replaced Republican George W Bush in the White House, and Mr Netanyahu’s right-leaning coalition took over from the centrist Ehud Olmert.

Mr Obama visited Cairo early in his presidency, delivering a speech reaching out to Muslims around the world.

He began demanding that Israel completely halt all settlement activity in the occupied West Bank, including in East Jerusalem – something the previous administration had not insisted on.

A year later, Mr Obama still has not visited Jerusalem as president, even though he appeared to cave in and accepted only partial restrictions on settlement growth, which angered the Palestinians.

Meanwhile, it took him until June to persuade Mr Netanyahu to even back the principle of a Palestinian state, which has been the basis of negotiations for nearly two decades.

The Israeli leader issued the new demand that Palestinians recognise Israel as a Jewish state and indicated the future of Jerusalem, where Palestinians want their capital, was not up for negotiation.

The gap between Israel and the Palestinians seemed to yawn wider – although historically, Israeli leaders have tended to lay out tough “red lines” and later abandon them.

To Palestinians, the building approval was more evidence of what they had suspected all along – that Mr Netanyahu wanted the cover of some kind of process, but was far from serious about the concessions needed for actual peace.

‘Doubled frustration’

The other factor, said Mr Eran, was the US frustration that its long, uphill struggle to bring the Palestinians to the negotiating table was at least partially at Mr Netanyahu’s request. Because of this, “the [US's] frustration is almost double”, he says.

Mr Eran does not believe the timing of the housing announcement was deliberate. He blames “balagan” – an Israeli slang word meaning “chaos” – in the government.

But Mrs Clinton made it clear she ultimately holds Mr Netanyahu responsible.

The Israeli media is now filled with speculation about how much the crisis will cost Mr Netanyahu – what he will have to do to convince the Palestinians he is serious about the indirect peace talks the announcement may have torpedoed.

It is widely seen as a political impossibility for any Israeli prime minister publicly to announce a suspension of building in East Jerusalem.

He is likely to face US pressure to quietly slow down at least some of it – perhaps even putting the 1,600 homes in question on ice – to claw back a piece of moral high ground.

But his statements on Monday suggest little willingness to do so. And his coalition contains right-wing parties for whom Jewish settlement of East Jerusalem is non-negotiable.

Israeli commentators are asking whether Mr Netanyahu will have to chose between his friends – his right-wing partners in government or the powerful ally that supports Israel with massive military aid and diplomatic backing on the world stage.

But the Obama administration, too, has a tricky course to steer.

With Republican gains likely in mid-term elections later this year, it knows the pro-Israel lobby on its own turf will be out in force. And at the moment, sections of it are angry.

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Israel and the US: A battered friendship

In a sign of growing tensions with Palestinians as well, clashes broke out between stone-throwing Palestinian youths and Israeli forces in and around Jerusalem. Dozens of Palestinians were slightly injured, according to Palestinian news reports, and Israel said that two police officers were also lightly injured. Israel said that 25 Palestinians had been arrested by early afternoon.

The activist group, Peace Now, pointed to a notice on the Web site of the Israel Lands Authority inviting developers to bid on construction of new homes in Jewish suburb of Neve Yaakov, in northeast Jerusalem.

The housing announcement, published on behalf of the Lands Authority and the Ministry of Housing and Construction, was posted as an “update” and was dated March 11, but it came to light only on Tuesday.

Israeli officials said that the building tender in question was actually a few months old, and that the successful bidders would be announced in April or May.

Last Tuesday the Israeli Interior Ministry announced 1,600 new housing units for Jews in Ramat Shlomo, another part of East Jerusalem, acutely embarrassing Vice President Joseph R. Biden Jr., who was on a visit here . The move infuriated the Obama administration, coming soon after it had announced the start of American-brokered Israeli-Palestinian indirect peace talks, the first in more than a year.

Mr. Netanyahu apologized for the timing of the announcement and called it a mistake “done in all innocence.” But he has not shifted regarding Israel’s insistence on its right to continue building in all of Jerusalem.

In November the Israelis announced a 10-month partial freeze on new settlement building in the West Bank. But they excluded Jerusalem from the moratorium because Israel has annexed East Jerusalem, which it conquered from Jordan in the 1967 war, and claims sovereignty over the whole city, a position the rest of the world rejects. The Palestinians claim East Jerusalem as the capital of a future state.

In a speech in Parliament on Monday, Mr. Netanyahu said, “No government of Israel for the last 40 years has agreed to place restrictions on building in Jerusalem,” listing every prime minister from Levi Eshkol to Ehud Olmert.

”During that time,” he continued, “all these governments have built in the suburbs of Jerusalem — in Gilo, in Ramot, in Neve Yaakov, in Ramat Eshkol, in French Hill, in Pisgat Zeev, in Ramat Shlomo and elsewhere.”

The establishment of these suburbs “did not harm the Arabs of East Jerusalem in any shape or form and did not come at their expense,” he said.

Ariel Rosenberg, a spokesman for the Israeli Housing and Construction Ministry, said the invitation for bids to build in Neve Yaakov was originally published in 2009 and was “not something new.” He had no immediate explanation of why there was a new announcement on the Web site dated March 11. A spokeswoman for the Israel Lands Authority said this was a Housing Ministry matter and had no comment.

Israeli groups who oppose Israeli settlement activity and monitor new developments say there are thousands more Jewish housing units in the pipeline for East Jerusalem, at various stages of the bureaucratic planning process.

“This is totally out of control,” said Hagit Ofran of Peace Now, a leftist organization that tracks settlement building. “The Netanyahu government is trying to make Jerusalem indivisible so that it will not be possible to reach a solution based on two states for two peoples.”

The clashes broke out after Hamas, the Islamic militant group, called on Palestinians to make Tuesday a “day of rage” to protest Israeli measures in East Jerusalem, including the dedication on Monday of a restored synagogue in the Jewish Quarter of the Old City, which lies across the 1967 lines.

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The Netanyahu government Making it impossible to reach a solution based on two states for two peoples.<.a>