Jerusalem approves contentious new building plan

[March 24, 2010]  JERUSALEM (AP) -- The Jerusalem municipality has approved 20 new apartments for Jews in east Jerusalem, the city said Wednesday, in a move that could stir a new diplomatic crisis with the United States just as Israel's leader is in Washington on a fence-mending visit.

The U.S. views Israeli building in east Jerusalem, the part of the city claimed by Palestinians as their future capital, as disruptive to Mideast peacemaking efforts. Israel, which captured east Jerusalem in the 1967 Mideast war, insists the city cannot be divided and says it has the right to build anywhere.

The differences over east Jerusalem erupted into a crisis earlier this month when Israel announced during a visit by Vice President Joe Biden that it plans to build 1,600 new apartments for Jews in east Jerusalem.

Israel has apologized for the poor timing of the announcement but rejected calls to cancel the project. In Washington this week, Prime Minister Benjamin Netanyahu told a pro-Israel audience that Israel was determined to keep building in all of Jerusalem -- a statement quickly rejected by the White House.

Netanyahu met twice with President Barack Obama on Tuesday in an attempt to defuse what has become the countries' worst spat in decades. But Wednesday's announcement by Jerusalem city officials threatened to derail any progress.

The new project -- funded by Jewish American millionaire Irving Moskowitz, a longtime patron of Jewish settler groups -- calls for tearing down part of an old hotel, the Shepherd, and building 20 apartments and a three-level underground parking lot instead.

Word of the approval was leaked to an Israeli Web site minutes before Netanyahu met with Obama at the White House on Tuesday.

Netanyahu, who has demanded that he be personally informed about any east Jerusalem construction projects before they are approved, was caught off guard by the announcement, according to a top aide, speaking on condition of anonymity because he was not authorized to discuss the matter with the press.

It was unclear whether the issue came up in the White House meetings.

Last summer, the U.S. demanded that Israel suspend the housing project and even summoned Israel's ambassador to Washington over the issue.

The Jerusalem municipality said the final go ahead was given a week ago after a lengthy bureaucratic process.

City spokesman Gidi Schmerling said plans for the project have been known since last July and that last week's approval was merely a procedural step. He said media reports were blowing the matter out of proportion, saying they were "meant to create a provocation during the prime minister's visit in the U.S."

Yair Gabai, the Jerusalem representative to the district's planning committee, told Israel's Army Radio that since the Biden visit the crisis all discussions on expanding building plans have been halted until further notice.

Israeli opposition figures lashed out angrily at Netanyahu.

"Is this another 'unfortunate' mistake? Is this another 'misunderstanding?'" left-wing lawmaker Eitan Cabel told Yediot Ahronot's Web site. "Netanyahu decided to spit into Obama's eye, this time from up close. He and his pyromaniac ministers insist on setting the Middle East ablaze."

Israel annexed east Jerusalem after capturing it in the 1967 Mideast war, but the move was never recognized internationally. The international community sees Jewish neighborhoods in east Jerusalem as no different from settlements in the West Bank.

Nearly 300,000 Israelis live in West Bank settlements, in addition to about 180,000 Israelis living in Jewish neighborhoods in east Jerusalem.

Moskowitz, a millionaire bingo magnate from Florida and an influential supporter of Israeli settlement in east Jerusalem, purchased the Shepherd Hotel in 1985. The hotel is located near a government compound that includes several ministries and the national police headquarters.

Moskowitz has funded similar construction projects in the past. In 1996, during Netanyahu's first tenure as prime minister, Moskowitz was involved in the restoration of an ancient tunnel in Jerusalem's Old City that touched off Palestinian riots in which 80 people were killed.

[Associated Press; By ARON HELLER]

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