State Department spokesman P.J. Crowley confirmed Monday that a new housing development in east Jerusalem had been a topic of conversation last week during a meeting between senior US diplomats and Israel's ambassador to the United States, Michael Oren.

Crowley said US opposition to construction in east Jerusalem and settlements in the West Bank had not changed.

"We have made our views known to Israel," he told reporters. "Our views are not new either: that this kind of construction is the type ... of issue that should be subject to permanent-status negotiations."

Crowley added that "we are concerned that unilateral actions taken by the Israelis or the Palestinians cannot prejudge the outcome of these negotiations."

On Sunday, responding to the reports that Washington had asked Israel not to build 20 housing units in the Sheikh Jarrah neighborhood in east Jerusalem, near Mount Scopus and the National Police headquarters, Prime Minister Binyamin Netanyahu declared that Israel would not bar Jews from buying apartments in east Jerusalem.

Although the story about US displeasure with the construction plan was front-page news in Israel on Sunday, it attracted little media attention in the US and has not yet generated any editorials in the major newspapers.

Israeli spokesmen in the US tried to explain that the issue did not constitute a "crisis" in US-Israel relations, but was yet another example of friends "agreeing to disagree."

Oren will officially present his credentials to Obama at a ceremony in the White House on Tuesday. During the ceremony he is expected to have a few minutes alone with the president.

Israeli officials also said they didn't think the issue should upend negotiations with US Middle East envoy George Mitchell over reaching some kind of compromise agreement on a settlement construction moratorium in the West Bank.

"From our point of view, we want to continue to pursue the dialogue with the Americans on the issue of settlements," one senior Israeli government official said. "We are seeking to find the common ground we are looking for, and believe the effort is important."

But, he added, no one should confuse the effort to reach some kind of agreement with the Americans on settlement construction with an agreement by Israel to any kind of building freeze in Jerusalem.

"There is a fundamental distinction," the official said. "No Israeli government ever agreed to restrictions in Jerusalem. On this there never was any diplomatic ambiguity."

As if to prove the point that this was an issue that crossed party lines, Kadima MK Otniel Schneller said Monday he was calling for assistance from Jewish organizations worldwide to help stop what he described as Obama's policy that was "not very different from that of [Palestinian Authority President Mahmoud] Abbas."

Schneller sent a letter to new Jewish Agency chairman Natan Sharansky, asking him for assistance in enlisting Jewish communities abroad to defend Jewish sovereignty over the area known as the "holy basin," the neighborhoods immediately surrounding Jerusalem's Old City.

"As head of the Jewish Agency, you bear the obligation of declaiming the nation's distress before the American administration - and no less importantly, before advisers to the current administration who are members of our own people," wrote Schneller in the letter, which he sent Monday.

Schneller also drafted a second letter on Monday, this one directed at Jewish community leaders in the US, asking for their assistance in convincing the administration to back down from its opposition to the project in Sheikh Jarrah. In this letter, he drew parallels between Tisha Be'Av - a day of fast that falls next week commemorating the destruction of both the First and Second Temples - and Obama's demand.

"A foreign superpower - call it Rome, Greece, whoever - came and destroyed the walls of the Jewish people in Jerusalem and took away their symbol of Jewish authority in Jerusalem - the Holy Temple," he wrote. "Today in the 21st century, the world's most powerful state is trying to call into question the walls of our authority in Jerusalem. The thought makes me shudder, even though I know that the United States is our greatest friend, and I understand how much our physical existence is dependent on it."
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