Prime Minister Benjamin Netanyahu of Israel told his cabinet on Sunday that the ill-timed announcement of new housing plans for a Jewish neighborhood in East Jerusalem during a visit by Vice President Joseph R. Biden Jr. last week had been “regrettable” and “hurtful.”

Mr. Netanyahu also said that the government had set up a committee to “examine the chain of events and to ensure procedures” to prevent such an episode from happening again.

But he did not indicate that the building project would be canceled — a move that might mollify the Obama administration and ease the start of indirect, American-mediated peace talks between Israel and the Palestinians. In fact, the prime minister did not refer explicitly at all to the contentious issue of building in East Jerusalem.

The Obama administration’s anger over the announcement on Tuesday of new construction — which embarrassed Mr. Biden and complicated efforts to restart peace negotiations — clearly had not subsided. David Axelrod, a senior adviser to President Obama, said Sunday: “What happened there was an affront. It was an insult.”

Mr. Netanyahu, who was by all accounts surprised by the announcement by Israel’s Interior Ministry, told his cabinet on Sunday that the incident took place “in all innocence.”

But Mr. Axelrod, speaking on the ABC News program “This Week,” said the announcement had “seemed calculated to undermine” the embryonic indirect talks between Israel and the Palestinians, which are being called “proximity talks.”

Mr. Netanyahu awoke Sunday morning to scathing criticism from commentators in Israeli newspapers, who accused him of incompetence and a failure of leadership.

Almost a year after taking office, the prime minister seems caught between the pressure to move forward with the peace talks, a prerequisite for building trust with the United States, and the resistance of the rightist parties in his governing coalition, including his own party, Likud.

In a column that appeared Sunday in the newspaper Maariv, Ben Caspit wrote that Mr. Netanyahu “keeps popping back and forth between those two weddings, and asks himself where he’s going to get caught when the music stops playing.”

“Well, that music stopped and he was caught, as usual, in between. Neither here nor there,” Mr. Caspit wrote.

Some analysts said that Mr. Netanyahu’s problem was not about constraints imposed by a coalition of his own making; they noted that conservatives in the Israeli government have no real alternative to Mr. Netanyahu, while he has the option of forming a different coalition with the centrist Kadima Party, which currently sits in opposition. That alternative, though, would come at some political cost for the prime minister.

Instead, they said, Mr. Netanyahu is still juggling his commitment to the peace process and his reluctance to break with the ideological right, which essentially opposes an accommodation with the Palestinians, and he has yet to make up his mind.

“Mr. Netanyahu holds the cards,” said Yehuda Ben Meir, a public opinion expert at the Institute for National Security Studies at Tel Aviv University. In the end, the prime minister “will have to decide in which direction he is going,” he said. “He cannot please everyone all the time.”

The plans for 1,600 apartments were announced by the Interior Ministry, which is run by Shas, a Sephardic ultra-Orthodox party that forms an important part of Mr. Netanyahu’s governing coalition. The apartments are supposed to be constructed in Ramat Shlomo, an ultra-Orthodox neighborhood in East Jerusalem in territory that was conquered by Israel from Jordan in the 1967 war. Israel claims sovereignty over all of Jerusalem; the Palestinians claim the eastern part as the capital of a future state.

Under heavy American and Palestinian pressure, in November Mr. Netanyahu declared a partial, 10-month freeze in residential construction in West Bank settlements, a move praised by the Obama administration as unprecedented. But he made it clear that the freeze would not apply in East Jerusalem, avoiding further confrontation with the Israeli right.

In a tense 43-minute telephone conversation with Mr. Netanyahu on Friday, Secretary of State Hillary Rodham Clinton said the housing announcement on Tuesday had sent a “deeply negative signal” about Israeli-American relations. Mrs. Clinton also told the prime minister that Israel must take specific actions to show its commitment to the relationship with the United States and to the peace talks, according to a State Department spokesman. Neither American nor Israeli officials have detailed what such actions might entail.

On the Israeli right, the prevailing feeling was that the problem lay not with Mr. Netanyahu but with the United States.

Danny Danon, a Likud legislator and a deputy speaker of Parliament who supports additional settlement construction, said that Mrs. Clinton’s “meddling in internal Israeli decisions regarding the development of our capital, Jerusalem, is uninvited and unhelpful.”

“In fact, it is sheer chutzpah,” Mr. Danon said.

Prof. Efraim Inbar, director of the Begin-Sadat Center for Strategic Studies at Bar-Ilan University, said the “Americans decided to make a crisis” over the proposed construction, “probably in order to extract more concessions from Israel.”

But he also offered some criticism of Mr. Netanyahu, saying he was disappointed with the prime minister’s apologies. “I expected him to say, ‘Jerusalem is ours,’ and he did not,” he said. “From my point of view, he is trying to be too flexible.”