It is incredibly unrealistic to expect any country to indifinitely cease building in their capital. Whether obama likes it or not, united Jerusalem is the eternal capital of Israel - not becuase US, EU or UN says so, but because Bible says so. Israel begged Jordan not to attack during Six Day War. Jordan chose unwisely and lost. They formally relinquished all rights to Judea & Samaria in the 1980's. No one else has more legal right to this land than Israel. Who other than Israel has ever been required to return land acquired in a defensive war?
from the article: U.S. bemoans Israeli plan for new West Bank houses