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Edition: U.S. Article Comments (10) Slideshow Video Save Email Print Reprints Most Popular Most Shared British pair faces jail time in Dubai over kiss 14 Mar 2010 Erin Andrews peephole stalker lands in jail 15 Mar 2010 Recession left "walking wounded" workers: study 12:08am EDT HBO puts "The Pacific" online 15 Mar 2010 UPDATE 2-Aftershock hits off coast of Chile, no damage 12:15am EDT Aftershock hits off coast of Chile, no damage 12:16am EDT Erin Andrews peephole stalker lands in jail 15 Mar 2010 Mexico gunmen kill American consulate staff | Video 15 Mar 2010 U.S. raps Europe for underfunding defense 23 Feb 2010 UPDATE 1-China Sunergy to buy two solar module cos for $47 mln 15 Mar 2010 Netanyahu defies U.S. over Jerusalem settlement Jeffrey Heller JERUSALEM Mon Mar 15, 2010 9:49pm EDT Related News TIMELINE: U.S.-Israeli relations since 1948 Mon, Mar 15 2010 Related Video More clashes in the West Bank Mon, Mar 15 2010 EU-Egypt meet on Israel settlement < 1 / 8 > View Full Size JERUSALEM (Reuters) - Prime Minister Benjamin Netanyahu on Monday rejected any curbs on Jewish settlement in and around Jerusalem, defying Washington in Israel's deepening crisis with U.S. President Barack Obama's administration. World | Barack Obama "For the past 40 years, no Israeli government ever limited construction in the neighborhoods of Jerusalem," he said in a speech in parliament, citing areas in the West Bank that Israel captured in 1967 and unilaterally annexed to the city. The United States condemned Israel's plan to build 1,600 new homes for Jews in Ramat Shlomo, a religious settlement within the Israeli-designated borders of Jerusalem, whose future status is at the heart of the Middle East conflict. Israel's announcement of the project during a visit last week by U.S. Vice President Joe Biden embarrassed the White House. U.S. Secretary of State Hillary Clinton, in unusually blunt remarks, called it an insult. The Palestinians, who had just agreed to begin indirect peace talks under U.S. mediation, have said they will not go ahead unless the plan is scrapped. Israeli media said Clinton last week demanded a reversal of the decision to build in Ramat Shlomo. Netanyahu's comments appeared to signal to Washington that he believed he had political backing at home to withstand U.S. pressure. Israel has said construction at the site will not begin for several years. The U.S. criticism of Israel prompted a backlash on Monday from U.S. lawmakers and pro-Israel lobby groups who urged the Obama administration to tone down its rhetoric. "If we want the Israeli government to act in a way that would be more in keeping with our objectives ... it doesn't help them to have public disparagement by the secretary of state," Senator John McCain, the 2008 Republican presidential nominee, said on the floor of the U.S. Senate. Clinton called Netanyahu on Friday to convey unspecified demands about the Ramat Shlomo housing project as well as about demonstrating commitment to U.S.-mediated indirect peace talks, the State Department said, without elaborating. U.S. officials said they were still waiting for Israel's formal response. U.S. Middle East envoy George Mitchell, who had planned to leave Washington on Monday for discussions with Israeli and Palestinian leaders on getting the talks under way, put off his departure, two U.S. officials said. They said Mitchell now aimed to leave on Tuesday but that was up in the air and he might go straight to Moscow for talks among the quartet of Middle East peace mediators: the European Union, Russia, the United States and the United Nations. MORATORIUM Netanyahu, who heads a coalition that includes pro-settler parties, including his own, said there was nearly total consensus in Israel that annexed areas of Jerusalem would be part of the Jewish state in any future peace deal. The Israeli prime minister imposed a 10-month moratorium on new housing starts in West Bank settlements in November, but excluded Jerusalem. The Obama administration, which had earlier pressed for a complete freeze, welcomed the move at the time, but the Palestinians deemed it inadequate. On Sunday, Netanyahu tried to play down what his envoy to Washington was reported to have described as a "crisis of historic proportions," voicing regret at a Cabinet meeting for the timing of the Ramat Shlomo announcement. The rift with Washington has raised concern in Israel that security cooperation with the United States in confronting a potentially nuclear-armed Iran might be harmed. In the West Bank city of Ramallah, Nabil Abu Rdainah, an aide to Palestinian President Mahmoud Abbas, pledged again not to return to peace talks until settlement was halted. Israeli troops wounded at least seven Palestinians at a checkpoint north of Ramallah during a rock-throwing protest against the Ramat Shlomo project and Israel's consecration of an ancient synagogue in the Jewish Quarter of Jerusalem's Old City, a tinderbox site in the conflict. Palestinians said the soldiers had fired live rounds but the Israeli military denied that, saying crowd-dispersal measures had been employed. In a sign the Obama administration may be trying to appear more even-handed, State Department spokesman P.J.. Crowley said Washington was "deeply disturbed" by unspecified Palestinian comments about Israel's consecration of the synagogue. "We call upon Palestinian officials to put an end to such incitement," Crowley told reporters in Washington. Tensions between Palestinians and Israel, which has occupied the West Bank since 1967, have escalated in recent weeks following an Israeli government decision to include West Bank religious sites in a Jewish national heritage plan. Citing biblical and historical links, Israel sees all of Jerusalem as its capital, a claim not recognized internationally. The Palestinians want East Jerusalem to be the capital of a future state in the West Bank and Gaza Strip. Some 500,000 Jews live in the West Bank and East Jerusalem, and about 2.5 million Palestinians. (Additional reporting by Ari Rabinovitch in Jerusalem; Mohammed Assadi in Ramallah and Susan Cornwell; Thomas Ferraro and Arshad Mohammed in Washington; Writing by Jeffrey Heller and Arshad Mohammed; Editing by Peter Cooney) World Barack Obama Comments See All Comments (10) | Post Comment Mar 15, 2010 9:58pm EDT “Citing biblical and historical links, Israel sees all of Jerusalem as its capital, a claim not recognized internationally. ” So, Israel needs to go back to their 1947 border which is the only one internationally accepted. The walls they have built elsewhere need to be removed and their settlements knocked down. And the Palestinians need a state. In exchange the neighboring Arab countries must recognize Israel’s right to exist and peace treaties must be signed. Pedro07 Report As Abusive Mar 15, 2010 10:16pm EDT “Citing biblical and historical links, Israel sees all of Jerusalem as its capital, a claim not recognized internationally.” These claims are based on 3000+ years old so called “historical” facts which are obviously diputed by the other parties. If every nation starts disputing borders based on 3000 years historical claims there’s gonna be a bit of fighting in the world, that I can assure you. Pedro07 Report As Abusive Mar 15, 2010 10:43pm EDT Very well-stated Pedro07. You make a very balanced case for both sides needing to make concessions. And I surely agree with you that Israel is making things more difficult for all of us by making its specious claim. It’s time for Israel to stop arrogantly advancing a position that flies in the face of international laws. orchardadvisors Report As Abusive Mar 15, 2010 10:46pm EDT Historical “facts” that are 3000+ years old are not called ‘facts’ by any historian – they are called MYTHS & LEGENDS CosaTiManca Report As Abusive Mar 15, 2010 10:55pm EDT Good job, Mr. Netanyahu. We’re trying to defy the Marxist punk terrorist loving Obama and his water buffalo Secretary of State too. The good people of America are with you. BHOShatOnUS Report As Abusive Mar 15, 2010 11:08pm EDT It is time the US leaves Israel to fend for itself. No more arms, no more assistance and no more talking. This is what Israel wants, so let them perish and put an end their sick dreams of having the world bow at their feet. For 3000 years they have not honored their word and it has become a part of their religion. See how far they get with no allies. Majick1 Report As Abusive Mar 15, 2010 11:30pm EDT So now we need another unstable totalitarian Islamic state because Israel and the four Arab Islamic states around them aren’t good enough. No, we don’t. Instead, Palestine should be returned to Israel, and a population exchange should occur between Israel and the neighboring Arab states similar to the 1921 exchange between Greece and Turkey. Sure, It’d be extremely drastic and would have long-term consequences, but it would contribute to stopping the massive amounts of bloodshed in the country and would stabilize the area in general. Viking09 Report As Abusive Mar 16, 2010 12:53am EDT no more “special relationships” with israel. if these baby killers think they are all grown up and can handle themselves, then good riddence. israel is one of the biggest burden we have. we do not gain from this relationship. end the relationship with israel now sidrock23 Report As Abusive Mar 16, 2010 1:09am EDT Let’s be honest and call them what they are, colonies. borisjimbo Report As Abusive See All Comments (10) Add a Comment More from Reuters Fed seen renewing low rates, extended period vow WASHINGTON (Reuters) - The Federal Reserve is expected to hold interest rates near zero at a meeting on Tuesday and renew its pledge to keep borrowing costs very low for a long time, but could note a brightening economic picture and hint at being closer to dropping the vow. Record number of Chinese unhappy over inflation Toyota casts doubt on "runaway" Prius claim | Video Sen Dodd boosts Fed in new financial reforms | Video China warns Google to obey rules even if it pulls out Lehman Brothers' whistle blower was ousted: report » More Top News China building a debt mess There's a darker side to China's relentless investments: vast sums borrowed by local governments and plowed into projects that will never pay for themselves. Full Article Wen wraps populist agenda in poetry China name-calling a costly move Coming Up Tuesday, March 16: A live chat with Michael Lewis Have a question for Michael Lewis? Submit them here. The author of "The Blind Side" and "The Liar's Poker" will be joining us March 16th to talk about his new book. Live Coverage Felix Salmon: "The Big Short" Rolfe Winkler: Lewis on his book Economy © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts.com Buyouts Europe: Buyouts Conferences: Venture Capital Journal EVCJ International Financing Review International Securitisation Report Project Finance International PEhub.com PE Week Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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