Israeli Prime Minister Netanyahu’s office denied reports about a diplomatic crisis between Israel and Germany over Israel’s announced plan to build 1,100 new houses in Gilo, a Jewish neighborhood in Jerusalem.
A spokesman for Netanyahu said Israel’s relationship with Germany and Chancellor Angela] Merkel ""are good and close."
"When there are differences of opinion they are cordially discussed," he added.
In a telephone conversation on Friday, Merkel told Netanyahu that she "lacked any comprehension for the approval of new construction plans for Gilo, just days after the Quartet declaration has been passed," according to a statement issued by German government spokesman Steffen Seibert.
The advancement of the Gilo housing plans "raised doubts over whether the Israeli government was interested in the resumption of serious negotiations," Merkel told the Israeli Prime Minister.
"What now counted was to dispel such doubts," the statement said.
She reiterated to Netanyahu the Quartet statement calling on both sides to refrain from making "provocative actions."
EU foreign policy chief Catherine Ashton also deplored the Gilo plan and urged Israel to "reverse" its decision.
French Foreign Minister Alain Juppe on Saturday
crticized the Gilo construction and added that it gave the Palestinians an excuse not to accept the initiative, according to the reports.
But Netanyahu rejected world condemnation of the construction plan, saying that Gilo, "is not a settlement nor an outpost."
"It is a neighborhood in the very heart of Jerusalem, about five minutes from the center of town."
In an interview with The Jerusalem Post, on the eve of Rosha Hashana, the Jewish New Year, Netanyahu said that the US was aware of the plans and that there was nothing new in Jewish building in the capital.
"We plan in Jerusalem. We build in Jerusalem. Period. The same way Israeli governments have been doing for 44 years, since the end of the 1967 war. We build in Jewish neighborhoods, the Arabs build in Arab neighborhoods, that is the way the life of this city goes on and develops for its Jewish and non-Jewish residents alike," the Israeli Prime Minister said.
"Every peace plan put forward for the past 18 years, including the Clinton parameters of 2000 and the Geneva Initiative, has stated that Gilo will remain part of Israel in a final-status agreement," Netanyahu’s spokesman, Mark Regev, said. "Every Israeli government since 1967 has built in the Jewish neighborhoods of Jerusalem."
The Palestinian have said that they will not negotiate with Israel until it halts construction in the West Bank and in east Jerusalem. Israel has said that they are ready for talks at any time, without any conditions, and has urged the Palestinians to return to the negotiating table.
Palestinian Authority officials said over the weekend that while the Quartet proposal for relaunching talks with Israel contained "encouraging elements,” they want the Quartet members (US, EU, UN and Russia) to provide "further clarifications" regarding the "terms of reference" for the peace process and the issue of construction.
The Palestinians submitted last month a unilateral request for recognition of their state by the United Nations.
The Palestinians needs nine votes in the 15-member Security Council.
But the US has said that it would veto such a move.