Seems to me that rather then a Netanyahu government planned insult to the Obama Administration, this is an example of the contradictory forces making up the Israeli government. Mr. Yishai is from a right wing, religious party bent on impressing it's supporters with it's tough stance on settlements, specifically when a US VP is visiting the Palestinians.
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U.S.: Russia violated Turkish airspace despite warnings, but dialogue needed (Reuters)
from the article: U.S. gave Israel green light for East Jerusalem construction