- The Washington Times - Tuesday, March 16, 2010

JERUSALEM | The Obama administration is demanding that Israel call off a contentious building project in East Jerusalem and make a public gesture toward the Palestinians to help defuse one of the worst U.S.-Israeli feuds in memory, officials on both sides said Monday.

But Prime Minister Benjamin Netanyahu showed little sign of yielding, saying Jewish construction in East Jerusalem “in no way” hurts Palestinians. A Jerusalem city spokesman suggested Jewish building there would continue.

Announcement of the plan to build 1,600 apartments for Jews in the Ramot Shlomo neighborhood came during Vice President Joseph R. Biden Jr.’s visit last week, embarrassing him and the Obama administration, angering Palestinians and endangering the start of indirect peace negotiations that are to be mediated by a U.S. envoy.

Adding to tensions was a ceremony Monday in the walled Old City in East Jerusalem, where Jews rededicated an ancient synagogue destroyed after the war that followed Israel’s creation in 1948. Israeli police sent in reinforcements to prevent riots. The synagogue is in the Jewish Quarter, but Palestinians still saw the colorful celebration as an affront.

After a weekend of rare broadsides from top U.S. officials, including Secretary of State Hillary Rodham Clinton, American demands became clear Monday. The U.S. wants Israel to cancel the construction plan, U.S. and Israeli officials said, speaking on the condition of anonymity because no announcement was made.

American officials said they were also insisting that Israel take significant steps to get peace talks back on track. These might include releasing Palestinian prisoners or turning over additional West Bank land to Palestinian control.

Washington, the officials 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 that followed Israel’s 1948 creation.

But Mr. Netanyahu appeared unreceptive to the main demand, defending four decades of construction for Israelis in East Jerusalem.

“The building of those Jewish neighborhoods in no way hurt the Arabs of East Jerusalem and did not come at their expense,” he told Israel’s Parliament Monday.

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

The unusually harsh U.S. criticism has undercut Mr. Netanyahu’s efforts to play down the crisis. 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 U.S. haven’t been this tense in decades.

Israel does not stand to benefit from antagonizing its most important ally, but Mr. Netanyahu has historically taken a hard line against territorial concessions to the Palestinians.

A curb on East Jerusalem construction also could fracture his hawkish governing coalition.

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