Israel announced during Biden's official visit Tuesday that construction would begin on 1,600 housing units on land Israel has occupied since the 1967 Middle East War.
U.S. Secretary of State Hilary Clinton called the surprise announcement "a deeply negative signal about Israel's approach to the bilateral relationship and counter to the spirit of (Biden's) trip." Clinton said the project "undermined trust and confidence in the peace process and in America's interests," State Department spokesman P.J. Crowley said during a media briefing Friday.
Clinton raised the United States' "strong objections" to the announcement and its timing in a conversation with Netanyahu Friday, Crowley said.
Netanyahu delivered his first public remarks on the matter Sunday during an Israeli Cabinet meeting, the Los Angeles Times reported.
"There was a regrettable incident, that was done in all innocence and was hurtful," he said.
Netanyahu did not say whether Israel plans to accede to U.S. and Palestinian pleas that the project be suspended.
"I recommend not to get carried away and to calm down," he said. "Israel and the U.S. have mutual interests. But we will act according to the vital interests of the state of Israel."