TEL AVIV - Israeli Prime Minister Benjamin Netanyahu voiced regret on Sunday for the announcement of a Jewish settlement plan that has strained ties with Washington and threatens the revival of Middle East peace talks. In his first public remarks on what Israeli commentators called his most serious crisis with Washington since taking office a year ago, he gave no sign he would meet Palestinian demands to cancel a project for 1,600 new settler homes. "I suggest not to get carried away and to calm down," Netanyahu told his cabinet, after a reprimand by US Secretary of State Hillary Clinton and written statements issued by the prime minister's office that failed to calm the dispute. "There was a regrettable incident here, that occurred innocently," Netanyahu said, referring to an announcement by a government ministry during a visit last week by US Vice President Joe Biden, of planned construction in an area of the West Bank that Israel has annexed to Jerusalem. The timing of the disclosure, after Palestinians agreed to indirect peace talks, embarrassed Biden and raised questions over whether Israel's settlement policy could harm US-Israeli security cooperation on the question of Iran. "It was hurtful and certainly it should not have happened," Netanyahu said of the announcement by the Interior Ministry, controlled by the religious Shas party, a member of a governing coalition dominated by pro-settler parties, including his own.
