Last November, following Israel's decision to push forward with plans to build a settlement in the so-called 'E-1' area -- east of Jerusalem in the Israeli-occupied West Bank -- and build an addition 3, 000 housing units in occupied territory, Jeffery Goldberg wrote in Bloomberg of Obama's exasperation.
But Israel regards East Jerusalem - which it annexed in 1967 - as its territory.
The Israeli Cabinet did agree to allow campaigning in east Jerusalem -- except for militant groups.
That said, Mr Netanyahu's approval last month for a new Israeli settlement to be built midway between south-east Jerusalem and Bethlehem is more than a bump on the track.
The highly contentious issue of Israeli construction in the West Bank and East Jerusalem -- land the Palestinians seek for a future state -- is one of the main sticking points preventing the resumption of negotiations between Israelis and Palestinians.
The Vatican only recognised the Jewish state 46 years after its creation and, like the rest of the international community, it does not recognise Israeli sovereignty over east Jerusalem - which during the visit of Pope Paul VI was under Jordanian rule.
Israel has sought to ring-fence East Jerusalem from any territorial retreat, and it hopes to annex the largest settlement blocs on the east side of the Green Line, which house a large majority of settlers.
BBC: Obstacles to Middle East peace: Borders and settlements
When you see, again, new housing in East Jerusalem today announced -- what is the leverage behind these talks?
The National Religious Party, a key partner in the coalition, called on the prime minister to rescind his opposition to an American developer's plans for a Jewish housing estate at Ras al-Amud in East Jerusalem.
But Mr Fayyad suggests bypassing the formal peace process, now anyway at a standstill, partly because Israel refuses to stop building or expanding Jewish settlements in the West Bank and on the Arab-populated east side of Jerusalem.
Palestinians in East Jerusalem have cast ballots at East Jerusalem post offices in the past under the terms of the Israeli-Palestinian agreements at Oslo, Norway, in 1993.
Secretary-General Ban Ki-moon criticized an Israeli plan to build an 800-home settlement in East Jerusalem.
CNN: Abbas: Israeli settlements 'greatest obstacle' to peace
Palestinians are seeking to establish their capital in East Jerusalem under a two-state solution.
Never mind that from East Jerusalem, the Israeli-controlled remainder of the city can be shelled at will with Kassam rockets or even mortars.
CENTERFORSECURITYPOLICY: Gang-rape in Annapolis, Saudi-style
In contrast, Jewish Israelis are moving unimpeded into homes they claim to own in the middle of Sheikh Jarrah, an all-Palestinian district of East Jerusalem.
Arafat was angered by a deal between Israel and a group of renegade Jewish settlers who last week set up housekeeping in the predominately Arab Ras al-Amoud neighborhood of east Jerusalem in defiance of the Israeli government.
Palestinian sources see new flexibility in Mr Barak's positions, suggesting that he may be ready to cede control of the Haram al-Sharif (Temple Mount to Israelis) and its Palestinian-populated environs in East Jerusalem, insisting only on safeguards against any digging under the Mount, where Jews believe there are vestiges of their ancient, holy temple.
They want recognition on pre-1967 borders, with East Jerusalem as their capital.
His controversial visit in 2000 to the al-Aqsa mosque compound in east Jerusalem, a site which is also holy to Jews, was one of the sparks for the second Palestinian intifada (uprising).
We at the Center for Security Policy take great pride in our long-standing relationship with Caroline Glick-- our Senior Middle East Fellow--who recieved the Guardian of Zion Award this year in Jerusalem.
Israel seized East Jerusalem from Jordan during the Six-Day War in 1967 and regards the land as part of its undivided capital.
CNN: Abbas: Israeli settlements 'greatest obstacle' to peace
Israel captured East Jerusalem from Jordan during the six-day war of 1967.
Israelis and Arabs approve and deplore the decision for the same reason: the new town, to be called Har Homa, would complete the ring of Jewish-only estates that divide Arab East Jerusalem from its West Bank hinterland, making it extremely hard to see how East Jerusalem could ever be the capital of a Palestinian state.
Severed from its West Bank feeder towns, Ramallah and Bethlehem, Arab East Jerusalem at night feels like a ghost-town sunk in neglect.
The Middle East was reduced to monuments--the Pyramids, Jerusalem, occasionally Petra.
The sole voice in favor of a cease-fire came from Mahmoud al-Mehdon(ph), a Palestinian from east Jerusalem who was looking at school bags with his wife.
NABLUS, West Bank (CNN) -- Palestinian Authority President Yasser Arafat on Thursday criticized Israel's decision to build housing for Jews in Arab east Jerusalem, saying it was a violation of Israeli-Palestinian peace moves.
For example, the Administration strongly opposed last month at the Human Rights Council the creation of a fact-finding mission regarding settlements in the West Bank and East Jerusalem.
Today, more than a quarter-million Israelis live in the West Bank, not including East Jerusalem.
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