US-Israel relations were plunged into crisis Wednesday, soon after President Barack Obama and Prime Minister Benjamin Netanyahu held talks at the White House that began with a good-natured joint press briefing.

News that a Jerusalem planning committee had signed off on the final stage of approval for housing in a major new neighborhood of East Jerusalem — made public in a press release from anti-settlement group Peace Now just before the White House meeting — prompted the administration to issue some of the strongest language it has employed to condemn Israel, including the warning that Israel was endangering its relations with “even its closest allies.”

The comments from the White House and the State Department were issued after Peace Now revealed that the Jerusalem municipality last week okayed construction of some 2,500 homes for Jews and Arabs in the Givat Hamatos neighborhood. The US statements suggested that Washington felt deeply embittered and blindsided by the move, viewing Netanyahu as being disingenuous when telling Obama, at their press conference, that he wanted the US to help him win over Arab states to warm their ties with Israel and advance a two-state solution with the Palestinians.

Netanyahu rejected the American statements, telling reporters upon his return from the White House to New York: “I don’t understand this criticism, and I don’t accept this position.”

Implying that the US had jumped to erroneous conclusions about the intended mixed Jewish-Arab neighborhood, he added, “It’s worth learning the information properly before deciding to take a position like that.”

As for Jews moving into homes in the Arab Silwan neighborhood, also criticized by the US, he said: “Arabs in Jerusalem purchase homes freely in the west of the city and nobody says that’s forbidden. I don’t intend to tell Jews that they can’t buy homes in East Jerusalem.”

Netanyahu said the US had been informed of developments in Silwan, but not updated about the latest phase of the Givat Hamatos approval process, which he said was merely a “statutory formality that does not require publicizing.” He said discussion of the settlement issue in the White House meeting was not heated.

But nearly identical, stridently critical comments on the Givat Hamatos building plans were issued by State Department Spokesperson Jen Psaki and White House spokesman Josh Earnest, soon after Netanyahu and Obama completed their White House talks.

Psaki said the US was “deeply concerned” over Israel’s move to advance construction in the East Jerusalem neighborhood. “This step is contrary to Israel’s stated goal and it would send a very troubling message if they proceed with tenders or construction,” Psaki said, adding the move would “call into question Israel’s ultimate commitment to a peaceful negotiated settlement.”

Acknowledging that the language she was using was “strong,” Psaki went on to say: “This development will only draw condemnation from the international community, distance Israel from even its closest allies, poison the atmosphere not only with the Palestinians but also with the very Arab governments with which Prime Minister Netanyahu said he wanted to build relations.”

Earnest said the issue was discussed by Obama and Netanyahu, and used very similar language to condemn the move: “This development will only draw condemnation from the international community,” Earnest said. “It also would call into question Israel’s ultimate commitment to a peaceful negotiated settlement with the Palestinians.”

Earnest also condemned the recent move by a right-wing group to move Israelis into seven homes in the Silwan neighborhood of the capital in the dead of night.

“The US condemns the recent occupation of residential buildings in the neighborhood of Silwan by people whose agenda provokes tensions,” Earnest said. “It only serves to escalate tensions.”

The new 2,500 unit project at Givat Hamatos is contentious because, critics say, it would complete a band of Jewish areas that separate Jerusalem from nearby Bethlehem. The US has repeatedly criticized Israeli construction in East Jerusalem, which Israel annexed after capturing it in the 1967 war. The US considers building over the pre-1967 lines to constitute “settlement” construction, while the Netanyahu government insists it will not halt building inside what it claims as neighborhoods of its unified capital.

Netanyahu, in New York late Wednesday, also slammed Peace Now for releasing the news, calling it “irresponsible” and saying it had timed the move to harm his talks with Obama.

US State Department Spokeswoman Jen Psaki. (screen capture: YouTube)

US State Department Spokeswoman Jen Psaki. (screen capture: YouTube)

Appearing before reporters earlier, Obama and Netanyahu had betrayed little of the US displeasure. While the two leaders have long had a tense relationship, and have taken conflicting positions on the settlement issue and on moves to thwart Iran’s nuclear drive, each took a polite and cordial tone Wednesday in their brief public remarks.

News of the Givat Hamatos move, and the bitter US response, came just hours after the Palestinian Authority said it was submitting a bid to the United Nations Security Council to approve a Palestinian state within the pre-1967 lines, involving a full Israeli withdrawal by November 2016.

Psaki refused to say if the US would vote against the Palestinian statehood bid in the United Nations Security Council, saying the US first needed to study the draft petition.

However, she reiterated Washington’s position against unilateral moves by Ramallah at the UN. “We have made our concerns known to the Palestinians about their desires, their threats and their decisions to go forward unilaterally,” she said.

Givat Hamatos neighborhood (screen grab from YouTube)

Givat Hamatos neighborhood (photo credit: YouTube screen grab)

At their joint press conference, Netanyahu told Obama he was committed to a two-state solution. Obama, speaking alongside Netanyahu, said a change in the status quo was needed between the Israelis and the Palestinians.

The draft UN Security Council resolution circulated by the Palestinians called for a full Israeli withdrawal from the West Bank and East Jerusalem by 2016. The paper also called for “a just resolution” of the status of Jerusalem as the capital of two states, and of the Palestinian refugee problem.