11/10/2010 09:41 am ET Updated May 25, 2011

Netanyahu Defends Israel Settlements Construction After Obama's Criticism

Israeli Prime Minister Benjamin Netanyahu dismissed the renewed international uproar over new settlements in a contested part of Jerusalem one day after President Obama slammed Israel's latest building plan as being detrimental to Middle East peace negotiations.

In an interview with the Fox Business Network, Netanyahu called the diplomatic spat "overblown" and defended the plans for over 1,000 new homes in the Har Homa settlement of East Jerusalem, which the Palestinians claim as their future capital.

As reports:

"I think it's are talking about a handful of apartments that really don't affect the [peace] map at all contrary to impressions that might be perceived from certain news reports," Netanyahu said. "So it's a minor issue that might be turned to a major issue. I think this is wrong. You put the minor issues aside and you deal with the major issues...and you try to fashion a peace deal. If there's a deal to be made there, you'll see it in a year. If there's not a deal, then we won't succeed."

As the Washington Post reports, Netanyahu is currently in the United States for talks with administration officials on ways to revive peace talks launched in early September but disrupted by a dispute over continued Israeli building in West Bank settlements and in East Jerusalem. Netanyahu is scheduled to meet with U.S. Secretary of State Hillary Rodham Clinton in New York on Thursday.

Chief Palestinian negotiator Saeb Erekat said recognition of a Palestinian state in the West Bank, Gaza Strip and East Jerusalem was necessary if Israel moved ahead with the new construction plans in occupied territory, according to the Post.

"If by building settlements, Israel wants to boycott the creation of a sovereign Palestinian state, the world must respond by recognizing the Palestinian state on the 1967 border with East Jerusalem as its capital. Unfortunately, the international community continues to support a peace process that has nothing of peace and a lot of process. We will not accept the status quo anymore that has only allowed Israel to consolidate its occupation of our land."