Israeli Prime minister Benjamin Netanyahu has defended the move to build 1,300 new homes in occupied east Jerusalem, insisting it would never limit construction in East Jerusalem. In a statement received by AIR in Dubai today, the Israeli Prime Minister’s office has stated that Israel sees no connection between the diplomatic processes and planning and building policy in Jerusalem. The statement also claimed that Jerusalem is not a settlement but it is the capital of the State of Israel. Expressing the hope to overcome the disagreements between Israel and US on the issue, the statement says that Israel will continue to advance the diplomatic negotiations. The Israeli reaction has come following President Obama’s criticism of new Israeli housing plans for East Jerusalem. Referring to settlement activities, Mr. Obama said in Jakarta that this kind of activity is never helpful when it comes to peace negotiations.