Israel 'Will Build in Jerusalem': Netanyahu

Israeli Prime Minister Benjamin Netanyahu has asserted the country’s "right to build" in Jerusalem, following a row with the US over plans for new homes in the city, BBC reports.

"Jerusalem is not a settlement, it's our capital," Netanyahu said in Washington. But he did not mention controversial plans to build 1,600 new homes in East Jerusalem in his speech to a US pro-Israel lobby group.

The Palestinian Authority is furious at Israel's insistence on building on occupied territory seeing it as a serious stumbling block to the resumption of talks, which have been stalled for more than a year.

In his speech to a convention of the influential American Israel Public Affairs Committee, Netanyahu said that "the Jewish people were building Jerusalem 3,000 years ago and the Jewish people are building it today." But he said construction "in no way precludes the possibility of a two-state solution," adding that Israel wanted Palestinians to be "our neighbours, living freely."

Netanyahu also called on Palestinian leader Mahmoud Abbas to "come and negotiate peace," adding that while the US could help resolve the problems with the Palestinians, peace could not be imposed from the outside.

According to the BBC, nearly 500,000 Jews live in more than 100 settlements built since Israel's 1967 occupation of the West Bank and East Jerusalem. They are held to be illegal under international law, though Israel disputes this.