|Israeli Prime Minister Benjamin Netanyahu addresses the annual American Israel Public Affairs Committee (AIPAC) policy conference in Washington on March 22, 2010.|
Israeland the United States showed scant sign that they had narrowed their gap over Jewish settlement activity, but they glossed over the major US-Israeli rift it has caused.
In speeches to a pro-Israel lobby group, Israeli Prime Minister Benjamin Netanyahu and US Secretary of State Hillary Clinton diverged on how to proceed with newly-agreed Israeli-Palestinian peace talks.
However, they issued similar warnings about Iran's nuclear ambitions and both highlighted Washington's unwavering support for Israel's security.
In a private meeting on the eve of his White House talks with US President Barack Obama, Netanyahu and Clinton discussed possible actions to "improve the atmosphere" for stalled US-mediated talks, Clinton's spokesman said.
Spokesman Philip Crowley said in a statement that the pair met for more than an hour, joined at one point by Israeli Defense Minister Ehud Barak.
"Our focus remains creating an atmosphere of trust so that the parties can begin to address core issues through proximity talks and move to direct negotiations as soon as possible," Crowley said.
"We continue to make progress towards that end," he added.
The core issues are security for Israel, the status of Jerusalem, the fate of Palestinian refugees, and the boundaries of a future Palestinian state.
However, speaking to the annual policy conference of the American Israeli Public Affairs Committee (AIPAC), Netanyahu stood by plans for new homes in east Jerusalem, which the Palestinians claim as the capital of a future state.
"The Jewish people were building Jerusalem 3,000 years ago and the Jewish people are building Jerusalem today. Jerusalem is not a settlement. It is our capital," Netanyahu told 7,500 cheering delegates.
His remarks triggered a rousing standing ovation but also denunciations from a few protesters whose shouts were quickly drowned out by the AIPAC delegates.
Israel's March 9 announcement of 1,600 new homes in east Jerusalem triggered a rare US condemnation.
Palestinian officials threatened to pull out of the indirect talks that Washington spent months arranging after the Palestinians refused direct negotiations with Israel because of its settlement policies.
Speaking to AIPAC earlier, Clinton urged Israel to make "difficult but necessary choices" for Middle East peace.
The chief US diplomat told AIPAC that Washington had to condemn the new homes in east Jerusalem as well as settlements in the West Bank in order to preserve trust and ensure Israeli-Palestinian talks go ahead as agreed.
She said new construction "undermines" Washington as a credible mediator that must be ready to both praise and condemn actions on both sides.
The secretary also urged Netanyahu to ease the humanitarian crisis in the Hamas-ruled Gaza Strip, which is under an Israeli blockade.
But Clinton also told delegates worried about the open rift between the allies that US support for Israel's security is "rock solid, unwavering, enduring and forever."
Netanyahu told the pro-Israel lobby -- which drew around half of both houses of Congress to its gala dinner -- that he is confident that Israel will have the "enduring friendship" of the United States.
Nowhere in his 45-minute speech did Netanyahu mention the settlement row.
In fact, he boldly cited remarks made by US Vice President Joe Biden to illustrate the bilateral relationship's strength, even though Biden condemned Netanyahu's government for announcing the new settlements while he was in Jerusalem to support peace talks.
On Iran, Clinton and Netanyahu expressed similar concerns, although Israel sees the matter as more urgent than the United States.
Clinton said President Barack Obama's administration will take the time to develop biting sanctions against Israel's archfoe Iran but will not "compromise its commitment" to prevent Tehran from acquiring a nuclear bomb.
US bids to push through a fourth set of sanctions have run into opposition from China, a veto-wielding permanent member of the UN Security Council with growing trade ties with Iran.
AIPAC panelists warn the row over settler homes might distract from efforts to curb Iran's uranium enrichment program, which the United States and Israel fear masks a bid to build an atomic bomb.
Iran insists its nuclear program is for peaceful nuclear energy.
Israel has threatened pre-emptive military strikes against Iran.
Netanyahu said Israel expects "the international community to act swiftly and to act decisively to thwart this (nuclear) danger, but we will always reserve the right of self-defense."
US officials said meanwhile that Tuesday's White House meeting between Obama and Netanyahu will be a private dinner and, as with Clinton, will have no media availability or photo-op.