The Israeli prime minister expressed regret on Sunday for the announcement last week during a visit by the US vice-president of a plan to build Jewish settler homes in mostly Arab East Jerusalem.
But, in his first public remarks since the proposal was unveiled last Tuesday, Benjamin Netanyahu gave no indication of cancelling the construction. He also played down the growing confrontation with Washington that the proposal and the timing of its disclosure – made while Joe Biden was in Israel – have triggered.
Mr Netanyahu told his cabinet: “There was a regrettable incident here, which occurred innocently. It was hurtful and certainly it should not have happened.”
The announcement to build 1,600 houses in the Jewish neighbourhood of Ramat Shlomo in Israeli-occupied East Jerusalem, which Palestinians view as the capital of their future state, appears to have spurred the biggest crisis between Israel and the US, its closest ally, in years.
Hillary Clinton, US secretary of state, on Friday used unusually harsh words by blasting the Israeli disclosure as “insulting” because it took place during a visit by Mr Biden that was aimed at boosting a new round of US-mediated Middle East peace talks.
The same day, Michael Oren, the Israeli ambassador to Washington, was summoned to an unscheduled meeting with James Steinberg, US deputy secretary of state, according to Israeli media.
Mr Netanyahu has said he did not know of the approval of the construction plan by the interior ministry, which is controlled by the ultra-orthodox, pro-settler Shas party that is a key member of his governing coalition.
He tried to deflect media reports of a growing confrontation between his predominantly pro-settler government and the Obama administration. “I suggest not to get carried away and to calm down,” he said.
Nevertheless, he added that he has appointed a group of senior officials to probe into the events that led to the announcement “to ensure procedures will be in place to prevent those kinds of incidents in the future”.
A US envoy is due in the region later in the week to try to restart peace talks that have been suspended since December 2008. The Palestinians have resisted restarting negotiations without a total Israeli settlement freeze.
The settlement plan has prompted a torrent of condemnation of Mr Netanyahu by influential Israeli media commentators.
In a front-page editorial titled Time to Panic in the mass-selling Maariv newspaper, Ben Caspit, a veteran political correspondent, wrote on Sunday: “The crisis is still in full force and is reaching new heights. It seems to be much worse than anything we have known in the past decade.”
Yaron Ezrahi, a political scientist at Jerusalem’s Hebrew University, said the US might try to take advantage of the situation.
He added: “The people in the White House are thinking of how to exploit this crisis to extract more concessions from Israel for the peace negotiations.”
Such concessions, he added, might be a cancellation of last week’s approval of the building plan or an extension of the 10-month partial freeze on construction in the occupied West Bank, which expires in September.
David Axelrod, a senior aide to Barack Obama, US president, yesterday told NBC’s Meet the Press programme that Mr Netanyahu’s comments in response to US criticism showed “the message was received”, Reuters reported from Jerusalem.
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