US, Israel still at odds over Jewish settlements in East Jerusalem

By Matti Friedman
Associated Press / April 8, 2010

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JERUSALEM — Israel’s prime minister acknowledged yesterday that his government has yet to iron out its differences with the United States over Israeli construction in East Jerusalem, a dispute that has stalled American efforts to restart Mideast peace talks.

Benjamin Netanyahu said both countries are still working to find a solution but staunchly defended his government’s contentious settlement plans in the disputed holy city, calling them a long-standing Israeli policy.

“There are things we agree on, things we don’t agree on, things we are closing the gap on,’’ Netanyahu said of his talks with Washington. “We are making an effort.’’

The worst crisis in US Israeli ties in years erupted last month when Israel announced plans to build 1,600 new homes for Jews in East Jerusalem during a visit by Vice President Joe Biden, drawing sharp condemnation from Washington and calls to cancel the construction.

The announcement derailed US-mediated indirect peace talks between the Israelis and Palestinians just before they were slated to start.

The Obama administration has pressured Israel to halt construction in Jewish neighborhoods in East Jerusalem, the section of the holy city Palestinians claim as the capital of a future state, and has also pushed for a broader building freeze in Jewish settlements in the West Bank.

In November Netanyahu agreed to a 10-month freeze on most West Bank construction in order to get peace talks started; but he refused to include East Jerusalem, which Israel annexed in 1967 and considers part of its capital.

Netanyahu on Tuesday dismissed talk of a crisis with Washington and accused the media of blowing the disagreement out of proportion.

“What is being published doesn’t fit what we are talking about,’’ Netanyahu said. “Apparently, the discussion between us is more serious and more to the point than what is generally believed.’’

The Palestinians, meanwhile, are wary of Netanyahu and his hawkish coalition partners. They have refused to resume direct negotiations until Israel halts all construction in the West Bank and East Jerusalem. The Palestinians claim those territories, along with the Gaza Strip, for their future state.