The United States called on Israel to halt...
Palestinian authorities recently agreed to hold indirect talks with Israel mediated by the United States after a 15-month break. At the same time the Israeli government announced plans to build 1,600 new housing units in East Jerusalem, which has prompted strains in U.S.-Israeli relations.
Haaretz said that the current crisis in U.S.-Israeli relations was the most serious with the Americans since the confrontation between then U.S. Secretary of State Henry Kissinger and Yitzhak Rabin in 1975 over the U.S. demand for a partial withdrawal from the Sinai Peninsula.
On Saturday, U.S. Secretary of State Hillary Clinton called the announcement a "deeply negative signal about Israel"s approach to the bilateral relationship...and had undermined trust and confidence in the peace process."
The United States has demanded Israel take steps to restore confidence in bilateral relations and permit the resumption of peace talks with the Palestinians.