By Jeffrey Heller
JERUSALEM (Reuters) - Prime Minister Benjamin Netanyahu, saying he would not take orders over Israeli settlement in East Jerusalem, rejected on Sunday a U.S. demand to halt plans to build more homes for Jews in the disputed area.
New friction with Washington over the project to build 20 apartments in a part of Jerusalem captured by Israel in a 1967 war could deepen the most serious rift in relations between the two allies in a decade.
http://www.reuters.com/article/topNews/idUSTRE56I12020090719
Netanyahu defends Israel's sovereignty:
By Howard Schneider Washington Post Foreign Service Monday, July 20, 2009
JERUSALEM, July 19 -- Israeli Prime Minister Binyamin Netanyahu on Sunday defended plans for a new Jewish housing development in East Jerusalem, rebuffing the Obama administration's opposition to Israeli construction in the mostly Palestinian area.
"United Jerusalem is the capital of the Jewish people and the state of Israel. Our sovereignty over it cannot be challenged," Netanyahu said in response to questions that U.S. officials raised last week with Israeli Ambassador Michael B. Oren about a 20-apartment project approved this month. "We cannot accept the idea that Jews will not have the right to live and purchase in all parts of Jerusalem."
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/19/AR2009071900156_pf.html