Israeli Prime Minister Benjamin Netanyahu (Moti Milrod, Maan Images)

The Israeli Prime Minister Benjamin Netanyahu yesterday strongly defended Jewish settlement construction in East Jerusalem in the face of US pressure and what one of his own top diplomats described as the worst crisis in relations with Washington for more than three decades.

A defiant Mr Netanyahu appeared to be digging in despite clear indications that the Obama administration is now demanding the scrapping of plans for 1,600 new Jewish homes, whose announcement overshadowed last week's visit to Israel by the US Vice-President Joe Biden. Mr Netanyahu's stance appeared to guarantee, after a highly charged week, the protraction of a stand-off in which a full-scale diplomatic row blew up at the start of Mr Biden's visit and appeared to abate at the end of it. But it was then reignited by demands from Hillary Clinton and an angry White House that Israel make amends for the "insulting" announcement just as indirect negotiations with the Palestinians had finally been arranged.

The US is now said to be demanding substantive concessions from Israel after a warning by the Palestinian President Mahmoud Abbas that he would not take part in talks if the plan to expand the mainly ultra-orthodox Ramat Shlomo settlement went ahead. The row has appeared finally to bring to a head the year-long tensions between the two governments since Barack Obama tried in vain to persuade the Israeli Prime Minister to agree to a total settlement freeze. He was thwarted by Mr Netanyahu who agreed only to a partial 10-month freeze, which did not include East Jerusalem.

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The Israeli Prime Minister insisted yesterday that construction would continue "in the same way as has been customary over the last 42 years". He added: "The building of those Jewish neighbourhoods in no way hurt the Arabs of East Jerusalem and did not come at their expense."

But a prominent Fatah figure and former Palestinian foreign minister, Nabil Shaath, told The Independent that the prospect of talks resuming had been sabotaged by Israel's action. Speaking in Qatar yesterday ahead of reconciliation talks with Hamas, which governs Gaza, he added: "The speed at which Jerusalem is being Judaised and de-Arabised has surpassed any period in the history of the peace process and is so alarming that we cannot possibly continue giving cover to Mr Netanyahu that we are still negotiating while he is doing this."

To read the full article please visit The Independent.