"Jerusalem is not a settlement, it is the capital of Israel," the prime minister's office said Tuesday regarding plans to build 1,345 homes in the eastern part of the city, The Jerusalem Post reported.
Netanyahu's office said the government never agreed to restrictions in the city of 800,000 residents, making a clear distinction between Jewish neighborhoods in east Jerusalem and settlements in the West Bank, where the Israeli government halted new construction projects from November 2009 to September 2010.
"Israel does not see any connection between the peace process and the policy of planning and construction in Jerusalem, which has not changed in 40 years. For the last 40 years every Israeli government built in every part of the city. During that period peace agreements were signed with Egypt and Jordan and for 17 years direct negotiations were held with the Palestinians. These are historical facts. Construction in Jerusalem has never interfered with the peace process," Netanyahu's office said.
U.S. President Barack Obama Tuesday slammed Israel during a news conference in Indonesia, saying, "This kind of activity is never helpful when it comes to peace negotiations."
Netanyahu's office said it was looking forward to the prime minister's meeting Thursday with U.S. Secretary of State Hilary Clinton in hopes that it would "advance the peace process."