U.S. wants Israel to cancel building plans

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JERUSALEM — The United States is pressing Israel to scrap a contentious east Jerusalem building project, the approval of which has touched off the most serious diplomatic feud with Washington in years, American and Israeli officials said Monday.

Israeli Prime Minister Benjamin Netanyahu, however, gave no indication he intended to cancel construction of the 1,600 housing units, despite condemnation from a string of U.S. officials. Mr. Netanyahu offered a defense of his country’s building in the city’s eastern sector, which the Palestinians want as their future capital, and noted that Israel has been building there for more than 40 years.

“The building of those Jewish neighborhoods did not hurt in any way the Arabs of east Jerusalem and did not come at their expense,” he said Monday.

Tensions in the city at the center of the spat were high, with police out in large numbers in Jerusalem’s volatile Old City in expectation of renewed clashes and Palestinian shopkeepers shuttering their stores for several hours to protest Israel’s actions in the city.

Top U.S. officials have lined up in recent days to condemn the Israeli plan. The project was announced during Vice President Joseph R. Biden Jr.’s visit to the region last week, badly embarrassing the United States and complicating its efforts to restart Israeli-Palestinian peacemaking.

Obama administration officials said Washington wants the project canceled, though there have been talks with Israeli officials about alternative steps. Speaking on condition of anonymity because no announcement has been made, the officials said whatever Israel does must be a significant step to restore confidence and move peace efforts ahead.

Israeli government spokesman Mark Regev refused to comment Monday, but Israeli officials, speaking on condition of anonymity because no official decision has been made public, said Washington wants the construction project canceled.

Although Mr. Netanyahu has apologized for the timing of the project’s approval, he has not said he will cancel it.

Israel does not stand to benefit from antagonizing its most important ally, but Mr. Netanyahu historically has taken a hard line against territorial concessions to the Palestinians, and a curb on east Jerusalem construction would threaten to fracture his hawkish governing coalition.

The Israeli officials said the United States also wants Israel to make a significant confidence-building gesture toward the Palestinians, including possibly releasing hundreds of Palestinian prisoners or turning over additional areas of the West Bank to Palestinian control.

Washington, they added, also has demanded that Israel officially declare that talks with the Palestinians will deal with all the conflict’s big issues, including final borders, the status of Jerusalem and the fate of Palestinian refugees who lost their homes during the war around Israel’s 1948 creation.

The unusually harsh U.S. criticism has undercut Mr. Netanyahu’s efforts to suggest that the crisis had passed. Israeli newspapers reported Monday that Israel’s ambassador to Washington, Michael Oren, told Israeli diplomats in a conference call Saturday night that their country’s relations with the United States haven’t been this tense in decades.

U.S. Mideast envoy George Mitchell is expected in the region this week to try to salvage peace efforts.

East Jerusalem has been perhaps the most intractable issue dividing Israelis and Palestinians. Israel annexed the territory after capturing it in the 1967 Mideast war, and Israelis tend not to see the Jewish concentrations in east Jerusalem — home to some 180,000 Israelis — as settlements or as particularly controversial. Proposed peace agreements in the past have left them in Israel’s hands.

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