Jerusalem, Mar.16 (ANI): Israel has admitted that its relations with the United States are in a "crisis of historic proportions" in the wake of the row over 1,600 new settler homes.
In a telephone call, US Secretary of State Hillary Clinton ordered Netanyahu to reverse a decision to build 1,600 homes for Israeli settlers in occupied East Jerusalem that sparked the diplomatic row.
She also instructed him to issue a formal pledge that peace talks would focus on core issues such as the future of Jerusalem and the borders of a Palestinian state.
In addition, Netanyahu was urged to make a substantial confidence-building gesture to the Palestinians. Clinton suggested this could take the form of prisoner releases, an easing of the blockade of Gaza and the transfer of greater territory in the West Bank to Palestinian control.
The Telegraph quoted Israeli officials as saying that relations with Washington had hit a "35-year low" after a visit by Vice President Joe Biden last week was overshadowed by the announcement.
Washington has warned Israel's Prime Minister Benjamin Netanyahu that he will remain out of favour unless he accedes to the politically painful demands.
Signalling the depth of America's displeasure, Michael Oren, Israel's ambassador to Washington, told colleagues the crisis was one of "historic" proportions.
Not since the Gerald Ford administration had demanded Israel's partial withdrawal from Egypt's Sinai Peninsula had ties been so strained, he was quoted as saying.
Oren spoke after being summoned for reprimand at the State Department, which he described as "extremely harsh".
The Obama administration's anger towards Israel reflects a growing perception in Washington that Netanyahu is deliberately seeking to scupper the US president's attempts to resurrect the Middle East peace process.
Israel has consistently refused Palestinian demands for a limited halt to all Jewish construction on land captured during the Six Day War of 1967, although Netanyahu has agreed to slow down building in the West Bank for 10 months.
US anger has been exacerbated by the humiliation and embarrassment suffered by Biden who had expected to announce new talks during his visit last week.
Biden is thought to have been under the impression he had broken the impasse after allegedly securing a private commitment from Netanyahu that no new building would begin in East Jerusalem while talks were under way.
But just hours after he triumphantly heralded a new era of compromise, matters quickly soured when approval was given for the construction of 1,600 new homes in Ramat Shlomo, a Jewish settlement in East Jerusalem.
Netanyahu, who claimed he was unaware that the construction order had been made, apologised for the timing of the announcement and has, at Mrs Clinton's insistence, ordered an investigation into how it was made. (ANI)