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Edition: U.S. Article Slideshow Video Save Email Print Reprints Most Popular Most Shared U.S. puts brakes on "virtual" border fence 16 Mar 2010 U.S. air travelers complain about body scans 16 Mar 2010 Christie's puts record price tag on "key" Picasso 8:30am EDT Thieves grab up to $75 million in Eli Lilly drugs 2:00am EDT California governor's race tightens: poll 11:37am EDT U.S. puts brakes on "virtual" border fence 16 Mar 2010 Christie's puts record price tag on "key" Picasso 8:30am EDT Thieves grab up to $75 million in Eli Lilly drugs 2:00am EDT Insurer targeted HIV patients to drop coverage 10:17am EDT U.S. air travelers complain about body scans 16 Mar 2010 Israel moves to ease diplomatic dispute with U.S. Jeffrey Heller JERUSALEM Wed Mar 17, 2010 10:11am EDT Related News Israeli settlement dispute clouds quartet meeting 5:11am EDT Q+A: U.S. faces risky choices in Israel fracas Tue, Mar 16 2010 Q+A: "Crisis" in U.S. relations with Israel Tue, Mar 16 2010 Jerusalem clashes could signal more trouble ahead 9:42am EDT Related Video Clinton softens rhetoric on Israel Tue, Mar 16 2010 Palestinians clash with police < 1 / 3 > View Full Size JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu praised President Barack Obama on Wednesday and spoke by telephone with his vice president as a vocal feud over Jewish settlements took on softer tones. World But Palestinian President Mahmoud Abbas cast more doubts on prospects for indirect peace talks with Israel soon, reaffirming a demand it first halt all settlement construction. Palestinian youths threw stones at Israeli soldiers in the West Bank. In an unusual twist in a week of heightened rhetoric in the U.S.-Israeli relationship, Netanyahu had to distance himself from comments by his brother-in-law, an ultranationalist, who called the president an anti-Semite in a radio interview. "I have a deep appreciation for President Obama's commitment to Israel's security, which he has expressed many times," Netanyahu said in a statement, disavowing himself from all comments made by Hagai Ben-Artzi, his wife's brother. Israel angered the Palestinians and touched off a spat with Obama's administration after announcing plans, during a visit by Vice President Joe Biden last week, to build 1,600 homes for Jews near East Jerusalem, in West Bank territory it annexed after a 1967 war. Israel regards all of Jerusalem, including the eastern sector captured 43 years ago, as its capital. Palestinians want East Jerusalem to be the capital of the state they hope to establish in the West Bank and Gaza Strip. An Israeli political source said Netanyahu, who had already apologized to Biden over the timing of the settlement announcement, spoke by telephone on Tuesday with the vice president. The source gave no details of their conversation. U.S. Secretary of State Hillary Clinton had called Israel's settlement announcement an insult and pressed it to take steps to show it was serious about new peace moves. But in less confrontational tone on Tuesday, Clinton told reporters Washington has "an absolute commitment to Israel's security" and spoke of "a close unshakeable bond." A State Department spokesman made clear, however, that U.S. officials expected a formal Israeli response shortly to the demands Clinton laid out to Netanyahu last week, and that this would inform the next U.S. moves on the issue. Israeli media reports said Clinton wanted Israel to shelve the housing plan and agree to discuss core statehood issues with the Palestinians once indirect peace talks began. Netanyahu has said he would not curb building for Jews anywhere in Jerusalem. A day after stone-throwing confrontations with Israeli troops in East Jerusalem on Tuesday, Palestinian youngsters hurled rocks at soldiers near Ramallah and in Hebron, cities in the West Bank. There were no immediate reports of injuries. SETTLEMENT FREEZE With Arab League support, Abbas agreed two weeks ago to the U.S.-mediated talks, effectively backing away from his demand Israel halt all settlement activity in line with a 2003 peace "road map" that also obliges the Palestinian Authority to dismantle "terrorist capabilities and infrastructure." Reaffirming his original demand, Abbas told reporters on Wednesday: "We demand the fulfillment of commitments before going to indirect negotiations." U.S. Middle East peace envoy George Mitchell on Tuesday put off plans to return to the region. The State Department said he would not begin another mission until at least after Middle East peace mediators met in Moscow on Thursday and Friday. The diplomatic flareup over the past week has raised concern in Israel that security cooperation with the United States over a future nuclear-armed Iran could be jeopardized. The White House has been criticized by U.S. lawmakers and pro-Israel advocacy groups for its harsh stance toward Israel, which analysts said was likely one reason for its changed tone. Netanyahu is scheduled to address AIPAC, a pro-Israel lobby group, in Washington on Monday. During his visit, he is likely to meet members of Congress, where support for Israel is strong. No plans have been announced for talks with Obama administration officials. Obama himself is expected to be traveling overseas during Netanyahu's visit. (Additional reporting by Steve Holland, Arshad Mohammed and Ross Colvin in Washington and Tom Perry in Ramallah, Editing by Dominic Evans) World More from Reuters HIV positive, insurance negative When Jerome Mitchell, who has HIV, successfully sued his insurance company after it revoked his policy, he exposed a wrongdoing that could have repercussions for the entire health insurance industry. Full Article | Slideshow Healthcare Reform John Kemp: Let China decide The Schumer-Graham currency bill is a piece of election year theater that's just going to make U.S.-China relations worse. Commentary China unyielding on yuan Breakingviews: Where will the yuan go? Currencies Best of enemies? As adversaries go, fiery Iranian President Mahmoud Ahmadinejad and hardline Israeli Prime Minister Benjamin Netanyahu are oddly well-suited. Full Article Settlement dispute clouds meeting Risky choices for U.S. in Israel fracas Q+A: Crisis in U.S.-Israel relations World © 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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