- The Washington Times - Monday, March 22, 2010

JERUSALEM | Israel will not restrict construction in East Jerusalem, Prime Minister Benjamin Netanyahu said Sunday, despite a clear U.S. demand that building there must stop and a crisis in relations between the two longtime allies.

Mr. Netanyahu’s hard-line statement came just hours before he was scheduled to leave for Washington.

His meeting with President Obama on Tuesday will be the first high-level meeting since the crisis erupted 10 days ago, when Israel embarrassed visiting Vice President Joseph R. Biden Jr. by announcing a plan for construction in a Jewish neighborhood in East Jerusalem, which is claimed by the Palestinians.

“As far as we are concerned, building in Jerusalem is like building in Tel Aviv,” and there would be no restrictions, Mr. Netanyahu told his Cabinet.

This tough stance on Jerusalem has run into stiff opposition in Washington, but there were signs that Israel was working to ease the crisis. Cabinet ministers said that while there would be no formal freeze, construction in Jewish neighborhoods in East Jerusalem would be restricted, as with Mr. Netanyahu’s partial 10-month West Bank construction freeze.

At stake are the first peace contacts between Israel and the Palestinian government in more than a year. The Palestinians agreed to mediated talks, but the Jerusalem construction flap has given them second thoughts.

On Sunday, Mr. Netanyahu met with Mr. Obama’s special Mideast envoy, George J. Mitchell, who is set to mediate.

“Our shared goal … is the resumption of negotiations between Israelis and Palestinians in an environment that can result in an agreement that ends the conflict and resolves all ‘permanent status’ issues.” Mr. Mitchell said.

The diplomatic package Mr. Netanyahu is offering the U.S. to ease the bilateral crisis has not been made public, but officials say one element is agreement to discuss all the outstanding issues with the Palestinians in indirect peace talks Mr. Mitchell is set to mediate. Those would include the future of Jerusalem, as well as borders, Jewish settlements and Palestinian refugees.

Mr. Netanyahu has always opposed compromise over Jerusalem. Previous rounds of unsuccessful peace talks have included a formula for Israel retaining the Jewish neighborhoods, while Palestinians got sovereignty over the Arab sections, but Mr. Netanyahu pointedly took that off the table when he took office a year ago.

In the Gaza Strip on Sunday, U.N. Secretary-General Ban Ki-moon called on Israel to end its blockade on Gaza, imposed after Palestinian militants captured an Israeli soldier in 2006 and tightened when the Islamic militant group Hamas overran the territory the following year. Israel allows only basic humanitarian supplies into Gaza.

The blockade causes “unacceptable suffering” and “undercuts moderates and encourages extremists,” Mr. Ban said after visiting a housing project in the Khan Younis refugee camp. “My message to the people of Gaza is this: The United Nations will stand with you, through this ordeal.”

Most of the 15,000 homes destroyed or damaged during Israel’s war in Gaza last winter have not been repaired because of the ban on importation of most building supplies. Israel launched the war after years of militants’ rocket fire from Gaza.

In West Bank violence Sunday, the Israeli military said troops in the West Bank shot and killed two Palestinians carrying pitchforks and an ax who tried to attack a soldier.

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