Israeli Prime Minister Benjamin Netanyahu expressed "deep appreciation" for President Obama on Wednesday, distancing himself from his brother-in-law's characterization of Mr. Obama as an anti-Semite, as his government tried to ease tensions with Washington.
However, Mr. Netanyahu did not call Secretary of State Hillary Rodham Clinton with a response to her Friday demands that he prove his commitment to the peace process, as the State Department expected. Diplomats said the delay was most likely owing to the Israeli leader's intention to reject at least part of those demands.
In an attempt to end a diplomatic row with the Obama administration over his government's housing-expansion plans in occupied East Jerusalem, Mr. Netanyahu sought to limit the new damage done by his ultranationalist brother-in-law, Hagai Ben-Artzi, in an interview with Army Radio.
"It's not that Obama doesn't like Bibi — he doesn't like the nation of Israel," Mr. Ben-Artzi said, using Mr. Netanyahu's nickname, according to Israeli press reports.
"When there is an anti-Semitic president in the United States, it is a test for us, and we have to say: 'We will not concede.' We are a nation dating back 4,000 years, and you in a year or two will be long forgotten. Who will remember you? But Jerusalem will dwell on forever," he said.
The prime minister speedily issued a statement, "strenuously" rejecting Mr. Ben-Artzi's comments.
"I have a deep appreciation for President Obama's commitment to Israel's security, which he has expressed many times," Mr. Netanyahu said.
Israeli officials said he called Vice President Joseph R. Biden Jr. late Tuesday, but declined to discuss the content of the conversation. The current dispute began with Israel's announcement of 1,600 new housing units just as Mr. Biden arrived in the Jewish state last week.
Mr. Netanyahu's failure so far to respond to Mrs. Clinton's demands were cited by the State Department as the reason for canceling U.S. Middle East envoy George J. Mitchell's planned trip to the region this week.
Although the department refused to discuss the demands, Israeli media reports have cited reversing the housing decision and including so-called "final-status" issues, such as borders, refugees and the future of Jerusalem, in indirect talks Mr. Mitchell has been trying to start between Israelis and Palestinians.
Israeli Foreign Minister Avigdor Lieberman said Wednesday the "demand to forbid Jews from building in East Jerusalem is totally unreasonable." He called the current situation "an opportunity for the international community to jump on Israel and apply pressure to Israel."
The State Department, which on Tuesday indicated that Mrs. Clinton and Mr. Netanyahu would speak Wednesday before she departed for Moscow, said the secretary expects a formal response.
"We are still looking forward to a response. It hasn't happened yet. There hasn't been a call yet," department spokesman Mark Toner told reporters.
Meanwhile, Palestinian Authority President Mahmoud Abbas said Wednesday that Israel must stop all settlement activity, including in Jerusalem, before any negotiations could start.
Israeli President Shimon Peres seemed to offer a compromise in any future East Jerusalem settlement activity.
"Previous governments built in Jewish neighborhoods according to the new map and avoided construction in Arab neighborhoods," he said. "The Palestinians and we decided to continue as such in the past until we reach an agreed-upon map."
Also on Wednesday, Israel lifted its tight restrictions on Palestinian access to Jerusalem's holiest shrine, the Al-Aqsa Mosque, and ended an extended West Bank closure, following days of clashes between Palestinians and Israeli security forces. Thousands of police officers, however, remained on alert.
The Obama administration has come under pressure from both Congress and private groups to end its row with Israel. Mrs. Clinton dismissed accusations that the dispute will have a lasting impact on the relationship and affirmed the administration's commitment to Israel's security.
U.S. officials have said that continuing Jewish settlement activity on Palestinian land is a major impediment to the peace process. They have also suggested that Mr. Netanyahu's actions are motivated by domestic politics, rather than by Israel's security interests.
On Tuesday, Reps. Mark Steven Kirk, Illinois Republican, and Christopher Carney, Pennsylvania Democrat, wrote in a letter to Mr. Obama that a "zoning dispute over 143 acres of Jewish land in Israel's capital city should not eclipse the growing threat we face from Iran" — a reference to Tehran's nuclear program. The United States and Israel are working together to prevent Iran from building a nuclear weapon.
Gary Bauer, president of American Values, a conservative nonprofit organization, on Wednesday also wrote a letter to Mr. Obama, accusing him of "manufacturing a crisis that weakens Israel on the eve of new peace talks."
"Friends handle disagreements privately," he said. "Your public escalation sends a clear message of hostility and has increased tensions in the region."
Stephen M. Walt, professor of international relations at Harvard University and co-author of the controversial book "The Israel Lobby and U.S. Foreign Policy," disagreed, saying such views have Mr. Obama's policy "exactly backwards."
"This policy is not an act of hostility toward Israel; on the contrary, it is an act of extraordinary friendship for Obama to keep this difficult item on an already overcrowded agenda," he said.
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