Israel's Ambassador to the U.S., Michael Oren, on Sunday described the ties between Israel and the U.S. as 'great.'

In an interview with CNN, reporter Cindy Crowley said "I literally need a one-word answer. The state of U.S.- Israeli relations is..."

"Great," Oren replied.

The envoy also said that conditions for renewing peace talks with the Palestinians are as good as they have been in some time, and that Israel is prepared to make difficult decisions in order to achieve peace.

"There has been 16 years of negotiations with the Palestinians, including two cases where Israeli prime ministers put complete peace plans on the table, including Jerusalem," Oren said. "And throughout that entire period of peace-making, Israel's policy on Jerusalem remained unchanged.

"We feel that now we should proceed directly to peace negotiations without a change in policy," he added. "We understand that Jerusalem will be one of the core issues discussed in those peace negotiations, but the main issue is to get the peace negotiations started. We are waiting for the Palestinians to join us at the table. So far, they have not done so."

He also addressed the dispute between Israel and the U.S. over construction in East Jerusalem, saying that "any Jew or Arab has the right to build legally in Jerusalem, as in any other city in the country."

"That's our policy," Oren said. "The policy is not going to change.?

However, Oren added, "But we understand - we understand that Jerusalem is sensitive."

Oren last month was reported to have said that Israel-U.S. relations were at a 35-year low because of the row that developed over the East Jerusalem construction.

Israel announced the plan to build 1,600 more homes for Jews in East Jerusalem during a visit by U.S. Vice President Joe Biden aimed at ushering in indirect peace negotiations with the Palestinians.