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Defense Minister Ehud Barak on Sunday joined widespread condemnation of the Israeli government's recent announcement to build 1,600 new housing units in East Jerusalem.

"The mishap that took place while the U.S. Vice President Joe Biden was visiting was unintentional, but it was, without a doubt, unnecessary and damaging," said Barak.

Earlier Sunday, President Barack Obama's chief political adviser David Axelrod slammed the Israeli construction plan in East Jerusalem and said that the move, which was announced during Biden's visit, looked like a deliberate attempt to frustrate upcoming proximity talks between Israel and the Palestinians.

Barak, speaking during an event celebrating the upcoming Passover holiday, emphasized the importance of the Israel-United States friendship.

"Even though we are the ones ultimately responsible for our fate, the friendship of the United States is important to both the security and the peace of the region, and this friendship commits us to mutual respect and responsibility," Barak said.

"I am convinced that we must carry on the renewal of peace talks, and we must also invest thought and effort into it."

Referring to Israel's announcement of the plan to build 1,600 more housing units in the ultra-Orthodox neighborhood of Ramat Shlomo during a visit by Vice President Joe Biden, Axelrod told ABC's This Week that "what happened there was an affront."

Earlier Sunday, Prime Minister Benjamin Netanyahu referred to the announcement as a "harmful" incident that "should not have happened."

In his interview with ABC, Axelrod hinted that Israel's announcement was a deliberate attempt to thwart indirect talks with the Palestinians.

"It was an insult, but that's not the most important thing," Axelrod added, saying that the move was disruptive to upcoming proximity talks with the Palestinians and that the approval during Biden's visit "seemed calculated to undermine that, and that was - that was distressing to everyone who is promoting the idea of peace and security in the region."

Axelrod said that the bond between Israel and the United States was "strong," but adding that "for just that very reason, this was not the right way to behave."

"That was expressed by the secretary of state, as well as the vice president. I am not going to discuss what diplomatic talks we've had underneath that, but I think the Israelis understand clearly why we were upset and what, you know, what we want moving forward," Axelrod added.Responding to the possibility that Israel's move could have any effect on U.S. soldiers in the region, Axelrod said that he believed "that that region and that issue is a flare point throughout the region, and so I'm not going to put it in those terms."

However, the top Obama aide added that he did "believe that it is absolutely imperative, not just for the security of Israel and the Palestinian people, who were, remember, at war just a year ago, but it is important for our own security that we move forward and resolve this very difficult issue."

In his first public remarks on what Israeli commentators called his most serious crisis with Washington since taking office a year ago, Netanyahu gave no sign earlier that he would meet Palestinian demands to cancel a project for 1,600 new settler homes.

"There was a regrettable incident here, that occurred innocently," Netanyahu told his cabinet at its weekly meeting, though he urged ministers to stay calm amid the tensions.

"We opened the newspapers this morning and read all kinds of commentary and assumptions regarding the crisis with the U.S. I recommend not to get carried away and to calm down," Netanyahu said.

Netanyahu reiterated that he had appointed a committee to investigate the events leading up to the decision to ensure that such a thing not happen again.

The prime minister stressed the importance of Israel's relations with the United States, which were strained as a result of the incident.

The U.S. has waged harsh criticism of Israel's announcement on Tuesday about new settlement construction - a move that deeply embarrassed Biden and imperiled U.S. plans to launch indirect negotiations between Israel and the Palestinians.

The investigative team will be headed by Director-General of the Prime Minister's Office, Eyal Gabai, and will include members of the Interior Ministry, Housing Ministry and the Jerusalem Municipality.

U.S. Secretary of State Hillary Clinton on Friday called Israel's announcement "insulting" to the United States.

"I mean, it was just really a very unfortunate and difficult moment for everyone - the United States, our vice president who had gone to reassert our strong support for Israeli security - and I regret deeply that that occurred and made that known," Clinton told CNN.

Clinton did not blame Netanyahu personally for the announcement, but she said: "He is the prime minister. Like the president or secretary of state...ultimately, you are responsible."

Sources in the Prime Minister's Office said over the weekend that the ensuing crisis appeared to be orchestrated by the U.S. administration, as Netanyahu apologized to Biden and believed that the crisis was behind the two allies.