Israel told by US to stop East Jerusalem project

AFP, Jerusalem

The United States has told Israel to stop a building project in annexed east Jerusalem, in the latest dispute between the two allies over settlements, a senior Israeli official told AFP on Sunday.
Israel's ambassador in Washington Michael Oren was summoned to the State Department at the end of last week over the project, which aims to build housing units in the Sheikh Jarrah neighbourhood, the official said on condition of anonymity, confirming earlier media reports. There was no immediate US comment on the reports.
Jerusalem city authorities have approved the construction plans for the project, which aims to build the units on the site of the Shepherd hotel in the neighbourhood. The works are financed by American millionaire Irving Moskowitz, who has previously contributed to ultra-nationalist Jewish groups. The international community considers Jewish neighbourhoods in mostly Arab east Jerusalem to be Israeli settlements and the issue is one of the main obstacles in the hobbled Middle East peace process.
Israel captured east Jerusalem from Jordan in the 1967 Six Day War and later annexed that part of the city in a move not recognised by the international community. It sees all of Jerusalem its "eternal, undivided" capital and does not consider construction in east Jerusalem to be settlements.
The Palestinians want to make east Jerusalem the capital of their promised state. Under new US President Barack Obama, Washington has repeatedly pressed Israel to stop all settlement activity, something that hawkish Israeli Prime Minister Benjamin Netanyahu has so far refused to do. There are currently some 200,000 Jewish Israelis living in east Jerusalem, home to some 268,000 Palestinians. Meanwhile, Israel on Sunday rejected out of hand a United States demand to stop a building project in annexed east Jerusalem, in the allies' latest dispute over settlements. Hawkish Prime Minister Benjamin Netanyahu said the government was not going to place restrictions on Jewish residents in a city that the state .considers its capital.