Netanyahu instructs aides not to comment publicly on East Jerusalem construction

Prime Minister Benjamin Netanyahu has instructed his aides not to comment on the tense relations between Israel and the United States over construction in East Jerusalem, in a bid to defuse the situation. Officials in the Prime Minister's Office yesterday waited uneasily for reactions from the U.S. State Department and the White House.

Also yesterday, Israel's ambassador to the United States, Michael Oren, presented his letter of accreditation to President Barack Obama before a brief private meeting.

The Israeli media reports that the United States is demanding a halt to the Shepherd Hotel residential construction project in East Jerusalem, and remarks by Israeli officials - especially Netanyahu - on the issue caused tempers to flare within the Obama administration. In a private meeting, top American officials said they could not understand why details were leaked to the media. "The whole thing definitely didn't make them happy," said a senior Israeli official who is in contact with the U.S. administration.

State Department sources in Washington told Haaretz yesterday that Oren was not summoned for a "talking-to," as some reports indicated. They said that on Thursday Oren attended a previously scheduled meeting with Deputy Secretary of State for Management Jacob Lew. "The meeting dealt with at least eight different issues, the first of which was the presentation of Oren's letter of accreditation," a State Department source said. "The messages were routine, and one of them touched on the issue of East Jerusalem, and we expressed our concerns about the matter."

Senior Jerusalem officials who maintain contact with Washington say, however, that the East Jerusalem issue came up in phone calls with Oren even before the Thursday meeting, and that it was clear that the matter would be raised there. These sources say it was a major topic of discussion.

Next week several senior U.S. figures are scheduled to arrive in Israel, including Defense Secretary Robert Gates and special U.S. envoy to the Middle East George Mitchell, who will attempt to reach an understanding on future building in West Bank settlements.

Mitchell has been attempting to negotiate a deal under which Israel would at least temporarily freeze settlement activity in a bid to bring the Palestinians to the table and attract Arab concessions toward Israel.

Several options have been discussed, including a six-month freeze that would allow Israel to finish construction on certain settlement projects that have already been contracted, but officials say no deal has yet been struck.

Meanwhile, the Elad nonprofit organization recently submitted a request to build four new areas in the City of David section of East Jerusalem's Silwan neighborhood. The right-wing organization that works to settle Jewish families in the Arab village wants to build several residential structures, a 100-car parking facility, a synagogue, kindergarten and tourism facilities. Observers close to the issue believe the municipality is likely to approve the plans.