JERUSALEM - Israel refused on Sunday to bow to US calls for a freeze to all settlement activity in the occupied West Bank, as it fumed over the "unfair" demands that have raised tensions between the close allies.
"I want to say in a crystal clear manner that the current Israeli government will not accept in any fashion that legal settlement activity be frozen," said Transport Minister Yisrael Katz, a close ally of Prime Minister Benjamin Netanyahu.
The premier himself did not address the issue at the opening of the weekly cabinet meeting but the fighting words were echoed by other members of the largely right-wing cabinet, including from its most liberal party, Labour.
A senior Israeli official complained that Washington under President Barack Obama -- who has vowed to pursue Middle East peace talks as part of a changed approach to the region -- was placing unfair demands on its close ally.
"The Americans have demanded almost nothing from the Palestinians but are asking Israel to take steps that are a real sacrifice. These demands are unfair," he told AFP on condition of anonymity.
"The Palestinians are taking a passive approach. They're not even ready to meet the Israeli side and Abu Mazen (Palestinian president Mahmud Abbas) wants the Americans to do all the work," he said.
Abbas, who met Obama last week, 10 days after the US president met Netanyahu, has vowed that that he will not relaunch talks unless Israel freezes settlements in the occupied West Bank.
The Obama administration has demanded that Israel stop all its activity in the settlements, including the so-called natural growth construction that allows for building to accommodate a growing population.
The unusually blunt talk over one of the top stumbling points in the stalled Middle East peace process has raised alarm bells in Israel that the new US president could put pressure on the Jewish state as part of his new approach to the Muslim world.
"This is an unjustifiable demand that the government and the public do not accept," Interior Minister Eli Yishai of the ultra-Orthodox Shas party.
Social Affairs Minister Isaac Herzog of the centre-left Labour party that is the most liberal in Netanyahu's government, said that "one has to understand that there are various statuses within the settlements" and "saying that the picture is black and white or write or wrong is wrong."
More than 280,000 Israelis live in settlements dotted throughout the West Bank, which Israel captured in war in 1967.
Although the international community considers all settlements illegal, Israel makes a distinction between those that were built with the state's blessing and outposts, those constructed without authorisation.
Netanyahu has said he would dismantle outposts, but that it made "no sense" to ask for a complete freeze to construction.
Israeli officials have also complained that Obama's administration has yet to say it will honour commitments in a letter that then US president George W. Bush sent to then Israeli premier Ariel Sharon in 2004.
Bush said that given the existence of major settlement blocs in the West Bank it was "unrealistic" to expect Israel to fully withdraw from the territory as part of a final peace deal.
"This administration has not yet recognised the arrangements made between the Israeli government and the Bush administration," said Katz. "That can only raise concerns over future arrangements."
Aside from the settlements, there is stark disagreement between Washington and Israel over the creation of a Palestinian state, with Obama repeatedly saying he was committed to the principle and Netanyahu thus far refusing to endorse it in public.
Obama is due in Saudi Arabia and Egypt this week to try to reach out to Muslims and end the deep mistrust of the United States felt across much of the Islamic world.