WASHINGTON DC - Haaretz has learned that Clinton's list includes at least four steps the United States expects Netanyahu to carry out to restore confidence in bilateral relations and permit the resumption of peace talks with the Palestinians.

1. Investigate the process that led to the announcement of the Ramat Shlomo construction plans in the middle of Biden's visit. The Americans seek an official response from Israel on whether this was a bureaucratic mistake or a deliberate act carried out for political reasons. Already on Saturday night, Netanyahu announced the convening of a committee to look into the issue.

2. Reverse the decision by the Jerusalem District Planning and Building Committee to approve construction of 1,600 new housing units in Ramat Shlomo.

3. Make a substantial gesture toward the Palestinians enabling the renewal of peace talks. The Americans suggested that hundreds of Palestinian prisoners be released, that the Israel Defense Forces withdraw from additional areas of the West Bank and transfer them to Palestinian control, that the siege of the Gaza Strip be eased and further roadblocks in the West Bank be removed.

4. Issue an official declaration that the talks with the Palestinians, even indirect talks, will deal with all the conflict's core issues - borders, refugees, Jerusalem, security arrangements, water and settlements.

At the beginning of Sunday's cabinet meeting, Netanyahu tried to convey a message that there was no crisis in relations with the United States. But he sent precisely the opposite message to Oren in Washington.

In Oren's Saturday conference call with the Israeli consuls general, he said that the current crisis was the most serious with the Americans since a confrontation between Henry Kissinger and Yitzhak Rabin in 1975 over an American demand for a partial withdrawal from the Sinai Peninsula.

US Wants Israel To Cancel Jerusalem Building Plan

(WRMEA) - An even more provocative action by the Netanyahu government is its ongoing effort to cordon off East Jerusalem from the West Bank and to replace the Arab population with Jews. In addition to encircling East Jerusalem with massive Jewish settlements, Israel prohibits almost all West Bank Palestinians from entering the city and has confiscated the identity cards of more than a thousand Jerusalemites. In mid-December the government abruptly barred Palestinians from conducting a long-scheduled census in East Jerusalem intended to supply data needed to set economic and social priorities. One day before the count was to begin the Knesset, in a rarely used procedure, passed all three required readings of a bill prohibiting all political activity by Palestinians in Jerusalem "or any similar activity that does not conform with respecting Israeli sovereignty."

A statement issued from Netanyahu's office in support of the measure effectively scrapped a provision of the Oslo agreement calling for the future of Jerusalem to be determined in the final stage of negotiations. "Jerusalem is Israel's capital," the statement said, and the prime minister "will not allow any foreign activity in the city." Netanyahu's reference to a Palestinian census in East Jerusalem as "foreign activity" recalls the time when his former boss and predecessor, Yitzhak Shamir, called West Bank Palestinians "aliens in the land of Israel."

WEST BANK (AP) - Foreign Minister Avigdor Lieberman told Israel Radio that demands to halt Israeli construction there "are unreasonable" and predicted the row with the U.S. would blow over, saying neither side had an interest in escalation.

But Washington notified Israel early today that envoy George Mitchell had put off his trip indefinitely. Mitchell had planned on coming to wrap up preparations for relaunching Israeli-Palestinian peace talks. But now it's not clear when the indirect talks, to be mediated by Mitchell, will begin.

In East-Jerusalem, security forces, some on horseback, charged a group of more than 100 youths, who had set garbage bins afire and lobbed rocks at police. Palestinian merchants shuttered their stores, and Palestinian schools in the city were closed.

Violent clashes erupt in East Jerusalem as synagogue reopens.

The violence also threatened to spread to the West Bank. At the main checkpoint between the West Bank and Jerusalem, dozens of Palestinian teens threw rocks and a few firebombs at Israeli troops, who responded with tear gas and rubber bullets.

The Palestinian rescue service said six people were lightly injured. Israeli police said 39 people were arrested, including eight minors.

Palestinian officials called on the public to defend Muslim religious interests in Jerusalem following the re-dedication Monday of a historic synagogue in the Jewish quarter of the Old City.

The re-dedication has stoked recurring but unsubstantiated rumors that Jewish extremists are planning to take over the hilltop shrine at the crux of the Israeli-Palestinian conflict.

The site, known to Jews as Temple Mount, was home to the biblical Jewish temples and is Judaism's holiest site. Muslims call it the Noble Sanctuary and it hosts the Al-Aqsa mosque complex, Islam's third-holiest shrine.

Interior Minister Yishai and the Shas party in Netanyahu's coalition ... a choice made

(Christian Science Monitor) - In an interview with Israel Army Radio, Hagai Ben Artzi, the brother of Netanyahu's wife Sara, reportedly said: "it needs to be said clearly and simply: There is an anti-Semitic president in the US. It's not that Obama doesn't sympathize with [Mr. Netanyahu]. He doesn't sympathize with the people of Israel."

Netanyahu's office swifty published a condemnation: "I entirely reject the remarks of Hagai Ben Artzi."

1 Gilo: 850 homes approved for publication and planning objections in Nov 2009
2 Pisgat Zeev: 600 homes approved for publication and planning objections in Jan 2010
3 Sheikh Jarrah: Several Palestinian families evicted in past 18 months to make way for Jewish settlers after court ruled in ownership dispute
4 Ramat Shlomo: 1,600 homes approved for publication and planning objections in Mar 2010
5 Silwan: Demolition orders on 88 Palestinian homes built without difficult-to-get permits - Israel planning controversial renewal project
6. West Bank barrier: Making Palestinian movement between West Bank and Jerusalem harder - Israel says it's for security

US still waiting for Netanyahu response on settlement concerns