merkel - Emil Salman - October 2 2011
Chancellor Angela Merkel meeting with Prime Minister Benjamin Netanyahu at his office in January. Photo by Emil Salman
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The office of Prime Minister Benjamin Netanyahu on Sunday denied that a diplomatic crisis has erupted between Israel and Germany over Israel's approval last week of new construction in Jerusalem, beyond the Green Line. Instead the PM's staff blamed the Israeli media for misrepresenting the facts of the affair.

Haaretz reported Friday that German Chancellor Angela Merkel had berated Netanyahu over the approval of 1,100 housing units in the contested Jerusalem neighborhood of Gilo, just several days after the Mideast Quartet of peacemakers had presented its plan for renewing Israeli-Palestinian negotiations.

"Our ties with the German government and Chancellor Merkel are good and close," Netanyahu's office said in a statement. "When we have disagreements they are resolved in good spirits."

The Israeli media had manipulated the facts, the statement said.

"Just as the media was quick to report on a diplomatic crisis with the United States, and then it turned out from the U.S. president that the ties are stronger than ever, this time it also turns out that Israeli-German ties continue to be friendly just as they were," it said.

Yet Netanyahu's office did not relate to the fact that Merkel was the one to issue an official statement Friday, from which it could be understood that she had harshly admonished Netanyahu. Merkel's statement was highly irregular in light of the discrete manner and low media profile she has normally maintained in her relationship with Netanyahu over the past two years.

On Saturday, a senior Israeli official said Israel's new construction plan had greatly angered Merkel, particluarly as she had enlisted massive support for Israel over the past few weeks to help thwart a Security Council vote approving full Palestinian membership in the United Nations.

Senior German officials told their Israeli counterparts that Merkel was "furious" and "does not believe a word [Netanyahu] says."

At Netanyahu's request, Merkel had also put massive pressure on Palestinian Authority President Mahmoud Abbas to accept the Quartet's initiative to renew talks immediately, the Israeli official said. He said that Germany may now reconsider and support upgrading the PA status to that of a non-member state in the UN General Assembly.

Senior officials said Merkel was angry particularly because of the timing of the announcement on construction, which she felt had sabotaged efforts to return the Israelis and Palestinians to the negotiating table.