Israel to respond to US criticism of settlement plans

The Israeli Cabinet is seeking to formulate a response to US complaints over its settlement plans.

Prime Minister Benjamin Netanyahu's security cabinet held a late night session to discuss its answer to the US administration's call for confidence-building steps - ahead of proposed peace talks.

There is concern that delaying the response could worsen the rift between the two allies - triggered by Israel's announcement last week of plans to build 1,600 new Jewish settler homes in Arab east Jerusalem.

But President Barack Obama yesterday denied US-Israeli relations were in a crisis.