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Why Netanyahu is engaging Obama in a spat over E. Jerusalem 'settlements'

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After President Obama criticized the move during his visit in Indonesia, Netanyahu's office released a sharp note insisting that Israel would continue building in territory it considers part of its capital, and that doing so has never affected peace talks. Within hours the State Department's spokesperson responded by asserting the opposite.

Israel claims East Jerusalem, which it annexed after capturing it in the 1967 war, as part of its "eternal and undivided" capital and thus does not consider Jewish communities to be "settlements." Palestinians and the international community, who see East Jerusalem as occupied territory and the future capital of an eventual Palestinian state, see Jewish building there as prejudicing peace talks and illegal under international law.

Netanyahu knew of the 1,300 approved units

Zvi Hauser, a spokesperson for Netanyahu, told Israel Radio on Wednesday morning that the prime minister knew of the new approvals for some 1,300 new housing units in the Jewish neighborhoods of Har Homa and Ramot, located in areas incorporated into the city when the borders of Jerusalem were dramatically expanded after 1967 to buttress the Israeli military's hold on the city.

SPECIAL REPORT: How Israeli-Palestinian battle for Jerusalem plays out in one neighborhood

The publication of the approvals just as Netanyahu visited with Vice President Biden in New Orleans on Sunday upset the Obama administration, recalled a similar incident on Biden's March visit to the region.

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