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Israel and U.S. tone down their dispute

WASHINGTON - The United States and Israel stepped back Tuesday from their most public rift in a decade, a dispute over new Jewish homes in a traditionally Arab part of Jerusalem that quickly became a test of U.S. and Israeli commitment to peace talks and one another.

Secretary of State Hillary Rodham Clinton said U.S. and Israeli officials are in intense talks about resuming peace negotiations, moving past the breach opened when Israel announced last week, during a visit to Jerusalem by Vice President Joe Biden, that it will build 1,600 more Jewish houses in east Jerusalem.

Israeli officials privately say Prime Minster Benjamin Netanyahu - Washington-bound next week - is willing to go to some lengths to calm tensions. U.S. officials also are looking for a way to finesse their demand that Israel cancel the construction.

There is no obvious half-measure, and both countries are wary of looking weak to the other, to important political constituencies at home and to the Arab world. Still, the rhetoric from both capitals suddenly softened. "We have a close, unshakable bond between the United States and Israel and between the American and Israeli people," Clinton said. "We are both committed to a two-state solution. But that doesn't mean that we're going to agree."

The United States wants to see a gesture from Israel to the Palestinians and a statement that the biggest issues dividing those two parties, including the fate of Jerusalem, will be discussed.

"Israel appreciates and values the warm words of Secretary of State Clinton about the deep ties between Israel and the U.S. and the commitment of the U.S. to Israel's security," Israeli spokesman Mark Regev said. "Concerning the commitment to peace - Israel's government has proved over the past year its commitment to peace, in words and in deeds."

Netanyahu's looming visit leaves little time to paper over the rift. If Netanyahu gets a cold shoulder, he has little incentive to scrap settlements the United States sees as an affront to peace talks. If he skips the trip entirely, the Obama administration risks a backlash from a politically powerful pro-Israel lobby and its congressional backers, many of whom think Washington has already taken the spat too far.

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