Israel rejects US demand to end settlement project

ISRAEL has rejected a US demand to suspend a planned housing project in east Jerusalem, threatening to complicate an unusually tense stand-off with its strongest ally over settlement construction.

Israel rejects US demand to end settlement project

Israeli officials said the country’s ambassador to Washington, Michael Oren, was summoned to the State Department over the weekend and told that a project being developed by an American millionaire in the disputed section of the holy city should not go ahead. Settlements built on captured lands claimed by the Palestinians have emerged as a major sticking point in relations between Israel and the Obama administration because of their potential to disrupt Middle East peacemaking.

Although Prime Minister Benjamin Netanyahu recently yielded to heavy US pressure to endorse the establishment of a Palestinian state, he has resisted US demands for an immediate freeze on settlement expansion.

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