LINDA WERTHEIMER, host:
This is MORNING EDITION from NPR News. Im Linda Wertheimer, sitting in for Steve Inskeep who's on a reporting trip to Pakistan.
RENEE MONTAGNE, host:
And Im Renee Montagne.
We're getting updates now, on two political stories in the Middle East. Both have implications for relations with the U.S. In a moment, who's ahead in Iraq's elections? But first, what some see as a crisis between Israel and America.
Last night, President Obama spoke for the first time about U.S. anger over Israel's plans to build new Jewish housing in East Jerusalem. Though Israel now controls that part of the city, Palestinians want to make it the capital of their future state.
In an interview on Fox News Channel, the president said the bad feelings between the U.S. and Israel won't affect overall ties.
President BARACK OBAMA: Israel is one of our closest allies, and we and the Israeli people that have a special bond thats not going to go away. But friends are going to disagree sometimes.
MONTAGNE: President Obama on the dispute with Israel.
Joining us from Jerusalem is NPR correspondent Lourdes Garcia-Navarro, good morning.
LOURDES GARCIA-NAVARRO: Good morning.
MONTAGNE: And as of this morning, Lourdes, where do things stand? What, for instance, is the U.S. asking Israel to do?
GARCIA-NAVARRO: Well, the U.S. has asked Israel to rescind the housing construction order in East Jerusalem that kicked off this entire dispute. And while there have been contacts between senior officials on both sides - Prime Minister Benjamin Netanyahu and Vice President Joe Biden have spoken, U.S. Middle East envoy George Mitchell and the defense minister, here, have also talked - the U.S. is waiting for, it says, a formal response.
And that response will be made to Secretary of State Hillary Clinton. She's in Moscow at a meeting of the so-called Middle East Quartet, a group that represents the U.S., the E.U., the U.N. and Russia. As we heard from the president there, all sides I think are trying to calm tensions.
In an editorial in The New York Times today, Israel's ambassador to the U.S., Michael Oren, characterized the current situation as discord and he wanted to set the record straight. Last week he was described as having characterized this as a historical low between the two countries. And he said that that was not the case and he never said that.
But again, he maintained Israel's position that Jerusalem should remain the undivided capital here, and that Jewish building should be able to take place anywhere in the city.
MONTAGNE: Now, that East Jerusalem neighborhood where these housing units are expected to be built - 1600 altogether - you went there yesterday. Tell us about it.
GARCIA-NAVARRO: Yeah, Ramat Shlomo, it's an Ultra-Orthodox neighborhood located on a hilltop in East Jerusalem, right next to the Shafat refugee camp. It has about 20,000 Jewish residents. It's very tranquil, isolated. The residents there say they feel they live on disputed land, that the new housing is needed because of the housing crunch there. The Ultra-Orthodox tend to have large families, and they say this is an already existing community that is simply being expanded. This is not some new creation.
Of course, this kind of narrative incenses Palestinians. This week, Renee, we saw tensions here on the ground, with clashes in several neighborhoods around the city, between Israeli security forces and Palestinians.
What we hear from the Palestinian side so far is that they will not sit down to indirect talks until this matter is resolved.
MONTAGNE: And are there Palestinians in that neighborhood in East Jerusalem?
GARCIA-NAVARRO: There aren't Palestinians who live in the neighborhood, but there're certainly Palestinians who work in the neighborhood. In fact, one of the ironies here is that most construction in the occupied West Bank and also in East Jerusalem is done by Palestinians.
And having spoken to Palestinians who work in that neighborhood, they say they do it because they have to, because there is no other work on the Palestinian side. But that they wish that the neighborhood would not be expanded. They feel that Jerusalem's status should be determined through negotiations. And they say Israel is, instead, creating facts on the ground, which makes their aspiration of East Jerusalem as the capital of their future state practically impossible.
MONTAGNE: And generally speaking, how are Israelis viewing this crisis with Washington?
GARCIA-NAVARRO: Well, it's being played out here in sort of a political context. You know, the discussion is more about Netanyahu and the difficult position he finds himself in. He has a largely right-wing coalition that won't really allow him to make substantial concessions to the United States. But at the same time, he needs U.S. support - especially at a time when Israel perceives a possible nuclear threat from Iran.
MONTAGNE: Thanks very much.
GARCIA-NAVARRO: You're welcome.
MONTAGNE: Thats NPR's Lourdes Garcia-Navarro speaking to us from Jerusalem.
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