Israeli Prime Minister Benjamin Netanyahu is supposed to meet with President Obama at the White House at 5:30pm.

The meeting comes shortly after Israeli media reported that late last week, the Jerusalem municipality gave final approval to a group of settlers to construct 20 apartments at the Shepherd Hotel site in the contested Sheikh Jarrah neighborhood of East Jerusalem.

The Shepherd Hotel was purchased by an American Jewish businessman Irving Moskowitz who supports "heightened Israeli settlement in East Jerusalem, and plans to tear down the hotel and build housing units for Jewish Israelis in its place," Israeli daily Haaretz said.

The paper said final construction for the apartments was given last Thursday, the same day Netanyahu called Clinton to respond to U.S. requests about his commitment to the peace process.

It also comes as Netanyahu was on the Hill today using a chart to tell some lawmakers why he was not responsible and was in the dark about a housing announcement made during Vice President Joe Biden's trip to Israel earlier this month.

[UPDATE: "This is exactly what we expect Prime Minister Netanyahu to get control of," an administration official said Tuesday night. "The current drip-drip-drip of projects in East Jerusalem impedes progress."]

Netanyahu chose his right-wing "coalition over Obama, plain and simple," one former Israeli official commented.

In an interview taped Tuesday morning to air Wednesday on Charlie Rose, Israeli Defense Minister Ehud Barak, who is traveling with Netanyahu in Washington, said of the East Jerusalem housing announcement made during Biden's visit to Israel earlier this month: "I can assure that neither Netanyahu nor the Cabinet never knew about it in advance."

Barak added, "It’s unfortunate with the extremely complicated planning process and zoning process we have in Israel ... But now we, the government nominated a committee of senior level officials to make sure that this cannot happen once again."

UPDATE: The Israel Project forwards a press release from the spokesman for the Jerusalem municipality Wednesday which says: "The [Israeli media] report is distorted and is meant to stir up a provocation during Prime Minister Benjamin Netanyahu's visit in Washington. The plan was approved in July 2009 by the local committee. Its approval was published in the media at the time. The landowners only paid the fees on 15.3.10, and approval was granted automatically after that." (Emphasis added.)

In other words, final approval was granted only last week after the owners paid the fees, but the plan was approved last July. Have pinged several officials, my understanding from last summer was that U.S. and UK had vigorously protested the Shepherd Hotel project going forward after it was approved last July because it's particularly sensitive and now this project seems to be going forward as of last week, making the thrust of the Israeli media reports yesterday totally correct.

The press release is "an effort by the municipality to say that this was long established and it's all a formality and please don't pay attention, and there's nothing to see here, so move along," says the American Task Force for Palestine's Hussein Ibish. The Shepherd Hotel project "was suspended, more than once in the past, due to U.S. and other protests, but apparently the Israeli occupation bureaucracy went forward anyway and the whole thing got final approval two days ago after the 'fees' were paid. They're treating this as [an] irrelevant technicality and old news. It is neither of those things, of course."

"The whole Israeli approach over both the 1600 Ramat Shlomo units and these latest ones is to waive everything aside as a technicality being dealt with by local planning boards," Ibish continued. "This is ridiculous! Jerusalem settlement activity has global implications and cannot be determined by local committees, or even bureaucrats in the Interior Ministry."

"The final permits [issued last week] were a technicality," Americans for Peace Now's Lara Friedman, a former State Department official, said. "That said, it seems a stretch to assume that the timing of the settlers' decision to move on this now was coincidental or innocent."

Contacted by POLITICO Wednesday, Mark Regev, an Israeli government spokesman traveling with the prime minister, said he was not familiar with the Jerusalem municipality statement.