Israel is continuing to reject demands by the United States to halt Jewish construction projects in East Jerusalem.
Prime Minister Benjamin Netanyahu convened senior Cabinet ministers to discuss his tense visit to Washington this week and demands made by U.S. President Barack Obama to advance the peace process. Israel and the United States are embroiled in what diplomats describe as their worst crisis in relations in decades, over Israeli construction projects in disputed East Jerusalem. The U.S. backs Palestinian demands that East Jerusalem should be the capital of a future Palestinian state.
Mr. Netanyahu is standing firm against a building freeze there, despite intense U.S. pressure. And he has strong backing from his right-wing government. Parliamentarian Danny Danon of the Prime Minister's Likud party says Jerusalem must remain the undivided capital of the State of Israel.
"For many years we had a clear policy, left and right wing governments: Jerusalem is united," said Danny Danon. "We have to be very clear: We will build everywhere in Jerusalem, and we don't need approval, not from the Palestinians and not even from our close ally, the U.S. administration."
Israel is prepared to compromise on other issues. It is hammering out a series of goodwill gestures it hopes will appease the U.S. and goad Palestinians back to the negotiating table.
But Palestinian chief negotiator Saeb Erekat says his side will not return to peace talks until Israel cancels the new construction projects in East Jerusalem.
"What we need to see is Israeli compliance; so far we have seen Israeli defiance," said Saeb Erekat.
The U.S. hopes to have a peace agreement in two years, but at this point, it cannot even get the parties to sit down and talk.