Netanyahu: It's un-American to Rebuke Israel Over Jewish Homes in Jerusalem

WATCH: Israeli prime minister adds that restricting where Jews could live 'doesn't bode well for peace.'

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Israel's prime minister dismissed a recent White House rebuke of Israeli settlement construction, saying in comments broadcast on Sunday that the criticism goes "against American values."

The tough words by Prime Minister Benjamin Netanyahu threatened to deepen a rift with the White House over Israeli construction in the West Bank and East Jerusalem, areas captured by Israel in the 1967 Six Day War and claimed by the Palestinians as parts of a future independent state.

Israel came under fire last week after a Jerusalem city official signed the final go-ahead for construction of a new housing development in East Jerusalem. A day earlier, an ultranationalist Jewish group said dozens of settlers had moved into six apartment buildings purchased in the heart of the predominantly Arab neighborhood of Silwan in East Jerusalem.

Israel says East Jerusalem is part of its capital and considers Jewish housing developments there to be neighborhoods of the city. But the international community, including the United States, does not recognize Israel's annexation of the area and considers construction there to be illegitimate settlement activity.

In a striking public rebuke last week, the Obama administration warned Israel that the new project would distance Israel from "even its closest allies" and raise questions about its commitment to seeking peace with Palestinians.

In an interview broadcast Sunday on CBS's "Face the Nation," Netanyahu said he does not accept restrictions on where Jews could live, and said that Jerusalem's Arabs and Jews should be able to buy homes wherever they want.

He said he was "baffled" by the American condemnation. "It's against the American values. And it doesn't bode well for peace," he said. "The idea that we'd have this ethnic purification as a condition for peace, I think it's anti-peace." The interview was recorded Thursday.

The White House declined comment.

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